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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Tim McCormick who wrote (33208)	10/2/1998 10:44:00 AM
From: bluejeans	Respond to of 132070

Tim, What a great position to find yourself in.<G> You could buy an Asian mutual fund that has losses that will be passed thru this year. You will need to hedge that position to take the risk out of owning the Asian mutual fund. Then next year reverse the hedge and you should have a one year deferral.

To: Tim McCormick who wrote (33208)	10/2/1998 11:10:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Tim, There is no cheap way to lock in, but there are ways. Here are the cheapest. 1. Let's say you have Jan 120 Citicorp puts. If you sell them, you pay Uncle Sugar a bundle. However, if you buy calls with a jan $80 stirke price, you have effectively locked in your profit at a fairly low pure premium and commission cost. If the stock goes back up, your deep in the money call will go with it nearly one for one as your put loses money. The negatives are whatever pure premium you pay, the cost of money for holding a non-performing position, and commissions. 2. In the above example, you could also buy the stock. In Jan, you exercise your puts and offset it with your longs. You have to calculate whether the cost of holding this larger dead money position, plus commissions and less the dividends <VBG>, offset the pure premium from the stock option. Generally, they should be arbitraged to be a tossup. BTW, in both of these examples, there is a chance that Citicorp will continue to hit the skids. If so, you may have a nice tax loss in the long position, which is not a net loss, because you hold the puts. Hope this helps, MB