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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (5207)	5/25/1998 8:28:00 PM
From: Cary C	Read Replies (1) \| Respond to of 29382

Oct's look appealing Sergio but if this thing drops like a rock, the July's may not be a bad play. Looking forward to what Mike has to say. Cary

To: Sergio H who wrote (5207)	5/25/1998 9:29:00 PM
From: Sal D	Read Replies (1) \| Respond to of 29382

Sergio, first off I see the July 15s as 1 1/16 x 1 5/16 and I dont see July 12.5s at all. As you know I first determine a price I expect by a certain date and then run my calculations from there, first using known information and then using the implied numbers derived from that info to come up with my expected percentages(I cant wait for the reunion to go over this with you and Mike, I know you guys come up with your estimates another way and Im curious as to how you do). OK, now using Fridays close info I have worked out two scenarios the first is using June and July strike prices and assuming the price of TALK on 6/19 to be 16.5, the implied percentage gains would be as follows: June 20 12% June 22.5 26% June 25 21% June 30 13% July 20 14% July 22.5 15% July 25 17% July 30 12% The second was using October and January strike prices and assuming the price of TALK was 13.25 on 9/1/98, the implied percentage gains would be as follows: October 12.5 12% October 15 36% October 17.5 47% October 20 51% October 22.5 51% October 25 47% October 30 35% January 17.5 41% January 20 42% January 22.5 38% January 25 37% The main thing to remember is that using a different date or target price changes everything, this method does however give one a pretty good picture if one feels there target prices will happen. Also there are limitless scenarios one can work out just by changing the numbers on the worksheet once it is set up. Hope this helps somehow.