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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Matt Matthews who wrote (13511)	12/26/1998 7:37:00 PM
From: ed	Respond to of 74651

Well, if you want to exercise the option and own the stock when it is expired, then buy deep in money option, such as the year 2000 , $100 leap, the premium is only $6 for one more years, that means you borrow $100, and pay $6 (6%) of interest to hold the stock for one more year, the cost of borrowing is very low. If you want to play with options, then I suggest to buy the far out of money leap, say year 2001, $180 call, and the time premium is very low, the increase of the premium will accelerate before the stock hit the target price, and reduced when it is deep in money. So sell this long leap once it hit the strick price and roll up.