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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (8633)	6/24/1998 4:01:00 PM
From: Logos	Respond to of 74651

RE: <<I don't trade my MSFT commons; rather, I hedge my position with option plays.>> Congrats on your portfolio. Do you sell covered calls on MSFT or just buy calls and leaps? Also, do you buy or sell any puts? Would you (or anyone) care to comment on the following strategy: <<Very Long-Term Portfolio: MSFT, CSCO, DELL, VISX (and maybe SAPHY and SNRS) Then hold on to these stocks no matter what happens, but buy and sell in-the-money LEAPS, sell and buy back short-term deep out-of-the-money calls and maybe also sell some short-term puts>> Is this strategy similar to what you are using? The weakness seems to be that there is no hedging. An interest rate hike could kill this strategy, for example (buying puts as a hedge may help, though it may also be a waste of money). Also, it is very tech-centric. I've run some informal tests on historic data and the strategy works great, but that's not hard to do in a long-term bull market, no guarantee it'll work in the coming months. I've actually started implementing it, and am sitting on a sweet MSFT profit, while accumulating the funds necessary to buy the rest of the portfolio. Any comments? Thanks much. Logos