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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Casaubon who wrote (9527)	1/26/1999 10:15:00 PM
From: VincentTH	Read Replies (1) \| Respond to of 14162

Casaubon, I owned TDFX for a long time, still holding after all these times. I have averaged down from $24 to around $15.5 now, still hoping for a breakout. Looks like TDFX is doing the right thing towards being the high-flyer again. That said, there are still some tough time ahead. You have 2 moves to make here, with a cost basis of 15.25: 1. Looks for TDFX to break out tomorrow on good earnings. Sell the $15 strike call into strength. A higher strike price may be more desirable, depending on how the stock behaves tomorrow. Be warned that TDFX has the tendency to jump on earnings only to drop back after earnings. Last July TDFX announced $.5x vs $0.45 First Call consensus, but the stock still dropped because the expectation was $0.80!!! 2. If you expect the stock to move higher, and you plan to hold the stock beyond March when the merge is finalized, I would say buy the equivalent STBI shares at the open, then sell TDFX for a profit tomorrow. This arbitrage play brings you +8% return right away. I wish I have more dry powder to play. My 2 cents, //V

To: Casaubon who wrote (9527)	1/27/1999 8:23:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

TDFX has a 23.33% growth rate and an undervalued P/E. There are plenty of strike prices in the options and open interest to play with. I'm a little curious why the recent insider dumping starting in November and December at $14.00 by quite a few CEOs. That leads me to believe that there are some tough times ahead before TDFX rebounds. NASDAQ: (TDFX : $15) $189 million Market Cap at January 26, 1999 Trades at a 65% Discount PE Multiple of 17.6 X, vs. the 50.0 X average multiple at which the Software & Services SubIndustry is priced. Overhead price resistance with kick in at $16.00. Without some big earnings or news item I doubt it would break through. iqc.com VRTX not expected to earn profits in 1999. The earning losses have been getting smaller and smaller. Note! Short Interest for VRTX is 8.6% of the shares outstanding, requiring 13 days to cover. If a positive news item does occur, it could potentially create a nice short squeeze upward price gap! Open interest is weak for the stock! It is hard to tell if the public's expectations are built into the VRTX price already. Such large short interest with such a rapid price climb over the last two months is setting this stock up for a show down. Any negative news will cause VRTX to come crashing down! I would not own VRTX without a load of cheap PUTs for downside protection! NASDAQ: (VRTX : $31) $778 million Market Cap at January 26, 1999 Loss Expected for 1999; Drugs SubIndustry priced at 37.1X PE iqc.com