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

To: Tony B who wrote (28526)7/6/1998 11:47:00 AM
From: Mike Fredericks  Read Replies (3) | Respond to of 97611
 
Someone who is somewhat educated about options please tell me if I'm nuts when I'm looking at this trade.

Jan '99 CPQ 25 Call trading at 6 x 6 1/2
Jan '99 CPQ 30 Call trading at 3 1/2 x 3 7/8

If you assume that CPQ will be 30+ in Jan '99 (which I believe is a very safe bet) then why not go long the 25 Calls and short the 30 calls for a spread?

You have to put up $300 per contract (6 1/2 - 3 1/2) and in Jan '99 get $500 per contract for a 66% gain less commissions.

All this if CPQ just nudges up 1 point in the next 6 months?

What am I doing wrong?

-Mike



To: Tony B who wrote (28526)7/6/1998 3:43:00 PM
From: Senator949  Respond to of 97611
 
Re Michael's statement:

<< You said you wouldn't bother us anymore on 6/23 >>

Maybe we could get his account removed. His "Member Since" date indicates he is a non-paying member. Maybe we should petition SI to restrict free users to one account. If he lost his account maybe he'd stick to his DELL thread where he belongs.

Robin


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