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Technology Stocks : Data Broadcasting Corp. (DBCC) -- Ignore unavailable to you. Want to Upgrade?

To: Dave who wrote (2131)	1/6/1999 2:51:00 PM
From: moby_dick	Read Replies (2) \| Respond to of 5102

DBCC Option Play - No Lose? Someone sanity-check me on this one: Since DBCC has been volatile, the option premiums are way up. Today, I purchased 2500 shares at 17 1/2 and wrote Jun 17 1/2 calls at $6 1/8 and wrote Jun 17 1/2 puts at $5 3/8. This means I collected $11 1/2 worth of premium. If DBCC is higher than $17 1/2 in Jun, I keep the whole premium ($28K). I get diminishing returns down to a break-even point at DBCC=$6/share. If I am really worried about that, I can BUY the Jun 7 1/2 put for 3/4 and be in a no-lose situation! Can someone comment on this strategy and let me know if I am doing something wrong? It looks like a way to set up a great return. Additionally, if DBCC swings in price like it has, then I can even play the options more by buying and selling against the direction of the stock to get even more return. Comments are welcome and encouraged! Moby

To: Dave who wrote (2131)	1/6/1999 3:51:00 PM
From: Ariella	Read Replies (1) \| Respond to of 5102

Dave -- the road show isn't for retail investors, it's for institutional investors. I think the stock is acting just like it should given the context of the broader market. At a time like this, many people think next week looks "long-term" and take their profits to put the into other situations that look to be moving "faster." Depending on the close, tomorrow we may have a real shake-out day. After several soft days it will be easy to convince investors the show is over (when in fact is has hardly begun). Retail investors who wanted to hold but panic out now (as opposed to someone like yourself who simply decided to take profits) will rue their decision within a short time. Volume is not light today -- don't judge against that big day this week, judge against typical day for DBCC. The people who are leaving are scores of retail investors. Bet the buyers -- look at a volume chart and notice how big many trades are today -- are institutions. They will hold till IPO. This stock will cross 20 again by IPO day. Ariella