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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: SFgymrat who wrote (4165)	4/20/1998 9:59:00 PM
From: Brett Nelson	Read Replies (2) \| Respond to of 18016

<I bought 20 NNEG May 35 calls today at 7/16 and am hoping to sell at 7/8. Any thoughts or comments?> Given that implied volatility in NN options is currently around 64%, the Black/Scholes option pricing model suggests you would need NN to move to $31.50 tomorrow to hit your profit objective. By Friday, given that you are fighting time decay in your options, you would need NN to be at $32.00 for the option to be priced at $7/8. Of course, if implied volatility rises, these prices would be less; if it falls, these prices would be greater. Good luck.

To: SFgymrat who wrote (4165)	4/21/1998 1:34:00 AM
From: Dennis J.	Read Replies (1) \| Respond to of 18016

Consider buying more time and in-the-money. You may pay $4-5 instead of $0.50, but you get a much higher delta to start, you don't lose premium as you cross the strike, and the extra months let you withstand corrections. Results will be, I believe, higher percentage of profitable trades, fewer wipeouts, and even some home runs. You can also hold right up to expiration, since you didn't buy much premium up front. Other strategies may include putting on a spread with a couple of months to go, or as a hedge if fearing a near-term correction. Good luck!