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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (56088)	5/27/1998 7:43:00 AM
From: John F. Dowd	Read Replies (2) \| Respond to of 186894

1. You should get them at the ask. Problem is as you point out later th MM might change the ask and open the spread especially in a thin option. Use a limit. If you can but them slowly it is always the best way especially in a thinly traded option. You are trying to find the perfect world of how to buy an option as to whether to go limit or market. This depends on how anxious you are to establish your position and how thin the the trading in that option is? Regarding liquidity at time of sale there will always be a market for deep in the money options as they have real value. The premium will be a function of volatility and interest rates coupled with the time to expiration. Concerning the tax question re: conversion of option: I believe that the first transaction (conversion) is not taxable so the clock would begin once you take the latter position. I wonder though if their might be a more authoritative source. Try JK Lasser's Book. In summary LEAPS are not a bad idea but they are generally thinly traded. Go into them slowly with a limit. At the end, if they are in the money, they will be worth the same as if you bought the stock plus a premium but this premium will be less than the one you paid going in. Check a tax manual on the cap. gains question. You can do this by browsing the web or the book stacks Borders or B&N or even your local library. Question for you. Why are you bullish on INTC out through 2000?

To: Jacob Snyder who wrote (56088)	5/27/1998 1:57:00 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 186894

more on ZNLAT: Just bought my first options today. Interesting. The bid-ask was 12 1/8-12 7/8 , when I put my limit order for 15 contracts at bid 12.5. Nothing happened for a while, the stock continued in a narrow range, 73.5-74.4, the bid-ask didn't change on the CBOE site. Then, my order cleared, and I got all 15 for 12.5. The bid-ask then changed to 11 7/8-12 5/8. I never actually saw a ask at 12.5. I'm imagining some guy in a glass tower somewhere, seeing my order, thinking "let's wait and see if the order changes to market, or the limit bid price goes up, or the underlying continues to show weakness. How badly does this guy want those options? Then, a while later, he says to himself, "well, I guess he won't buy unless he gets 12.5, and INTC is slipping below 74 (which had held the last few days), might as well fill it." So me (sitting in my office in a dusty town on a sand spit on the northwest coast of Alaska), and some trader somewhere have an anonymous interaction, and money changes hands ("money"= numbers on databases somewhere; "hands" in a completely symbolic sense.) We live in an age of miracles.