Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: DavidG who wrote (33600)	5/18/1998 8:48:00 AM
From: Patrick Koehler	Read Replies (3) \| Respond to of 53903

David - E-Trade, and I am sure, other services, provide Black- Scholes for estimating pricing. For years, I have had various templates on my spreadsheet program with charts for the pricing. The charts change daily as the premium decays. I'm sure that you know the following, but for anyone not familiar with options, this is an easy explanation. MU closed Fri at 26 3/8. The Jun 27.5 put asking price is 2 11/16. The Jun 30 put asking price is 4 3/8. The Jun 32.5 put asking price is 6 1/2. If the price of MU were to drop 2 1/2 points today, then the Jun 27.5 would be approximately equal to the Jun 30 at 26 3/8, or 4 3/8. If the price of MU were to drop 5 points in the next couple of days, then the Jun 27.5 would be approx. equal to the Jun 32.5 at 26 3/8, or 6 1/2. (Jun 27.5 put w/MU@26.38-2.5pt)~=(Jun 30 put w/MU @26.38) (Jun 27.5 put w/MU@26.38-5pt)~=(Jun32.5put w/MU@26.38) and so on. With enough points, this can be plotted on a chart, but requires a french curve, so I do some charts the old way. Again, the charts changes daily with premium decay. I want to also point out a downside to options that can occassionally happen and really burn you, as I had happen this past week. I took the biggest loss in options that I ever had in my life last week. When a stock gets a double wammy like MU did with Nat'l Semi and Kurlak, one can buy or sell stock at the opening. Getting rid of options is another story. As you know, my computer has me changing trading directions about every two days, and I was caught on the long side. I had 80 May 27.5 options expirating Friday. You can't sell options at the open. I guess you can, but why pay commissions on nothing. <gg> I am going to take the high risk, whereas most should not, especially if you are married and the wife might learn of it.<gg> I presently feel fine, health wise, but my kidneys could fail from my disease, and the party is over. So, I am not interested in 6% CD's.<gg> Gotta make it or break it, and last week I broke it. Lost a bundle. But I will do it again. On the sidelines at the moment. Patrick

To: DavidG who wrote (33600)	5/18/1998 10:43:00 AM
From: mike iles	Read Replies (2) \| Respond to of 53903

DavidG, don't know what you're saying but if you think 64 Mbit isn't at $6-$8 check out Lehman's latest report which says they're selling at $8 in Asia. Jerry Denkera posted recently too and while not that low he indicated prices were lower than most people thought. What I'm trying to say is that instead of stabilizing, prices have dropped recently (contrary to DJ's article) and they will drop further as 64 Mbit ramps. There's still too much supply and there's no reason to believe that moving into 1999 will somehow magically change that situation. While I know you don't believe this David, MU is a laggard in 64 Mbit production. So the issue they're currently struggling with is trying to ramp 64 and get a decent yield while the price drops precipitously against them. Can they make money on 64s at $10, at $8, at $5??? When will 64s hit $5? ... this summer, this fall?? And please don't drag out the PC100 red herring. Everybody's going to make these parts. This is a commodity business. If MU had strong management, they would be investing heavily now at the bottom of the cycle. That's one way to win in a commodity business. Instead Stevie A. is going crying to Washington. Meanwhile the competition is opening fabs on his turf ... didn't someone just open in Oregon. Didn't MU just shelve plans to open a major test facility in the Lehi shell?? This is smart to pull in your horns at the bottom??? I've always had a grudging respect for MU's manufacturing skills but I'm starting to wonder if a lot of that wasn't due to Tyler Lowery. regards, Mike