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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: the options strategist who wrote (20230)	9/9/1998 2:11:00 PM
From: IQBAL LATIF	Respond to of 50167

Prior- I will buy like 95 calls if we break 1030 -- and sell 115 calls- Jan-- this is a good position in a equity that wants to go higher....always buy at the money calls if you are sure about a stock- pay up better than out of money 100- I would even look at 85's the time premium is the least but the risk is the highest-- say 85 may be worth 16$ you sell 115 for 4 $- now your outlay is 12$-- so effectively you are paying 12$-- but on day of expiry you may get 30$ a good return and best way to own a very pricey stock, the downside is if the market tanks your premium is on line-- so for that we only use this strategy in calmer environment or like I proposed it when market is really down like 7500 level-- for CSCO my feeling is good- if market tanks you can get out of your calls expecting that you see CSCO back up--- but as you see owning CSCO is 100000$ question by this you have play-- do 1 contract if size is a problem-- but the risk is limited to the premium you pay and even at 85 you will see that your premium of 12 will be around 6$....but in this case you should only play this once we cross 1030 to 1052 it is looking difficult right now but pits told me today morning that 1010 support should hold.. anyway paper trade and come back with your results-- take care never place your positions in the market on the way up or at the support.