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

To: Rainmaker who wrote (25301)	8/2/1998 10:33:00 PM
From: Spaw	Respond to of 36349

"Cheap" options are for novice options traders. Deep in time, in the money 12.50 calls give the most upside in the PairGain scenario. The likelihood of the stock moving to 20 is higher than above 20. You can gamble or speculate. I see the October 20's as gambling. Just my $.02, --spaw--

To: Rainmaker who wrote (25301)	8/3/1998 3:42:00 AM
From: Spaw	Read Replies (2) \| Respond to of 36349

Rain, Stock closed Fri. @ 13 1/2. Strike price is 12 1/2. You are paying 2 and change for 6 months of upside potential already in the money. All upside in the stock goes into your option position. Those Oct. 20's are so far out of the money you are paying 100 % time. Look at the potential for making money here. I'm essentially paying for 5000 shares of stock for the price of 1150 shares long. If PAIR goes to 15 in the next month or so, I get a buck and a half on close to 5000 shares. Deep in time and in the money gives me a lot more delta than that 'cheap' out of the money contract. High delta = high return. Downside is there as well, but I have a better chance of making money with the January 12.50s. Academic, but good food for thought. My thinking centers on the best chance at a good return. --spaw--