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

To: Jean M. Gauthier who wrote (14042)	1/9/1999 12:40:00 PM
From: t2	Respond to of 74651

Jean, I am always looking for short term trading opportunities. I think big US tech stocks are good long term investments but also want to capitalize on short term moves. I thought the drop in MSFT mid day down to 147 to 148 was too low. There is little premium left on the January call options because they going to expire next week. I am betting that the stock will rise above 150 sometime Monday and I would be able to unload both 145s and 150s at a profit (if I want to) . The premium will continue to decline as we get closer to Friday. That is, if the stock is at 148 by Friday mornings---the 150s are close to worthless and the 145 may be at about 3 1/2. However, I am hoping that is not the case. If the stock is at 155 on Friday late afternoon. My 145s should trade at about 10 and 150s should be at about 5 . The time premium is gone by late Friday afternoon. For example the Jan 155s will be worthless if the stock closes at 155. I bought the 150s at about 2 1/4 while I bought the 145s at about 5 1/8, on average. I don't recommend buying options on this or any other stock. It is lot more risky than buy stock. I personally try to time the market with a small percentage of my portfolio. It is very risky. If on Friday MSFT closes at 145 --- the amount i paid for 145s and 150s is lost. I plan to get out of options trading by MSFT earnings date and just buy more stock and even mutual funds instead. BTW- 1 contract of the Jan 150s would cost (2.25 X 100) 225 dollars plus commission. It entitles you to buy 100 shares at 150 on Friday.