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To: Jurgen Trautmann who wrote (4767)	12/7/1998 1:04:00 PM
From: John Harton	Read Replies (1) \| Respond to of 11051

Thanks Jury, Chris, and Berney for LEAPSservations RE: Berney's Most Excellent Chart IMHO there are many ways to look at the results rather than just % returns. For Example take big winner MO and big loser BA. Investor S buys 100 shares of MO @3813 for a net gain of 1743. Investor L buys 1 MOAH (control of 100 sh MO for a limited time) wagering only 363 and gaining 1162. Investor S buys 100 sh BA @5062 for a loss of 1775. Investor L buys 1 BAAX @463 for a loss of 457. Clearly at the extremes of loss or gain LEAPS look pretty good. It is when the stock doesn't move that LEAPS take a hit. MR. S 100 sh EK @ 7219 gains 137 MR. L 1 EKAO @563 loses 313 IMO most important, however, while the aggregate results show stocks + .8% vs LEAPS -10.% take this scenario... MR. S buys 100 shares of all 28 stocks in the basket @205,150 gaining 1641. MR. S could have bought 1 LEAP of all 28 @ 18,233 losing 1823 and left the other 186,917 in his cash acct earning ~3% (over 8 months assuming 5% annual) for +5607 and a net gain of 3784. In the process, he takes much less risk as in a severe downturn his leaps decline to 0 losing ~18k while his stock portfolio could drop say 20% losing ~40k. Observations: 1) LEAPS are at their best with volatile stocks(as Chris noted 4 BIG winners). Perhaps a basket of NAZ stocks(which we all trade) would show this better than DJIAs. 2) Upward gain in LEAPS is theorhetically unlimited(but as TG says you gotta have the BALLZ in one hand not to sell too soon). 3) Greatest advantage in LEAPS might be that possible loss is limited to the cost of call. My experience with options has been similar to Chris's in that short term options have been far more unfriendly(though in most cases I could have taken a quick profit) than LEAPS which have been very good to me with few small losses and many big gains( of course in a very friendly bull market). So perhaps the lesson is with LEAPS have courage, with shorter options hit and run. BWDIK Verbose and ramblin' -John PS To be fair MR S in Berney's chart would have received dividends while MR L would not. Also, buying 100 sh @ weights the portfolio to the more pricey stocks. 12-4 Bot YHQMH @6 7/8 ....WTH