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

To: dr. z who wrote (34573)	10/26/1998 12:51:00 PM
From: Knighty Tin	Respond to of 132070

Mark, O.K., with that opinion as my guide, I think you want to play the options leaving yourself some upside while taking in premium. I would not play the shorter term calls against the 2001 Leap. Though they annualize well, traders usually cannot annualize often enough to make up for the lower absolute premiums. I would look to sell 2000 or 2001 leaps in the $40 to $45 area. They offer a good compromise of some nice protection for your profits and some upside for your long Leap. You prefaced this by saying that you didn't want to sell the long. What I am about to say has nothing to do with Amat, but just my own options philosophy. You now have a nice chunk of risk in these options. You should congratulate yourself, but you should also ask if there isn't a better way to play this stock you like. My own preference would be to take some of that profit off the table and roll my long up to 30s or 35s. You keep most of the upside while putting some cash in your pocket. Then you can sell a $45 or even a $50 against it to protect some of that weighty new long premium. Of course, my way makes the IRS happy. <G> MB