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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (4599)	10/9/1998 8:50:00 AM
From: DanZ	Read Replies (1) \| Respond to of 6565

Linda, One thing that could go wrong with the LEAP strategy is IF VLSI finishes below 10 in January 2001, you would lose your entire investment. I'm not suggesting that this will happen but nobody really knows. If VLSI finishes at 12 1/4 in January 2001, you would break even (although you would have made money holding the stock) and if it finishes at 15, you would double your money on the LEAPS (but almost triple your money holding the stock). Instead of looking at the options in terms of how many shares you own and 1 option for each 100 shares of stock, you would have to buy enough options to approximately equal your dollar investment in the stock to keep the same return. Given the leverage in the options, it would be slightly fewer, but much more than 1 to 1. Options are risky business because of the time value. I think your best option was to roll over the puts, which you have already done. If it was me, I would keep rolling them over and one day VLSI will rally and they will expire worthless. Best of luck with your predicament. Dan