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

To: PMS Witch who wrote (14432)	1/17/1999 11:02:00 AM
From: t2	Read Replies (2) \| Respond to of 74651

Tuesday between 10:00 and 10:30, initiate a 'bull spread' by buying at-the-money February call and selling equivalent call with a strike price $5 greater. Tuesday between 3:30 and 4:00, close this position and buy February puts with a strike price $5 below current stock price with your profit. Be prepared to close this position Wednesday or Thursday with a reasonable profit. $5. DON'T GET GREEDY! What would you expect to get from such a move (what percentage of return)? I realize this may be some normal options strategy--I am not familiar with most of them. What kind of price moves are you expecting for optimal returns? Just curious.

To: PMS Witch who wrote (14432)	1/17/1999 11:18:00 AM
From: J. P.	Read Replies (4) \| Respond to of 74651

<<<Tuesday between 10:00 and 10:30, initiate a 'bull spread' by buying at-the-money February call and selling equivalent call with a strike price $5 greater. Tuesday between 3:30 and 4:00, close this position and buy February puts with a strike price $5 below current stock price with your profit. Be prepared to close this position Wednesday or Thursday with a reasonable profit. $5. DON'T GET GREEDY!>>> Are you going to actually use this strategy? The implicit assumption here is that Microsoft goes up on Tuesday and tanks on Wednesday. Now if you're so sure, why bother with a spread on tuesday? Why not just go long the in the money calls because the return would be better, and the commissions would be less to unwind. I think the second assumption of a Microsoft tanking would be the riskiest, and there's where you would be better off with a bear spread to offset your risk. But if you are so sure, my advice would be to sell premium, since that's where your best profits would be. I used to do call selling, credit spreads and things like that. And I used to do short term speculation on options like that too, but after thousands of contracts gave that up. Now I just buy puts or calls for a few bucks and wait for them to go to 15-20 and sell. Good luck to you, and hope you're wrong! I think Microsoft powers through the week to the upside.