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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Mark Brophy who wrote (4820)	4/9/1999 12:41:00 AM
From: Jimbo Cobb	Respond to of 10309

>>It's hard to complain about a 10% profit in a day Agreed, but these days it's hard to get excited about 10% moves, even in a day....I want at least 20%, but prefer 50-100% moves in 1-2 weeks. I plan to buy a boat-load of WIND tomorrow and turn around and sell both the calls and puts for November $17 1/2...you can raise $10 doing this, so basically you only have $3 1/2 per share out of pocket invested in WIND...let's say you buy 5000 shares...you only have $17,500 out-of-pocket invested. Come November, if WIND is above $17 1/2, your stock gets called away for $17 1/2 per share, or $87,500 total, for a 5x return on your money in 7 months. If WIND is under $17 1/2, assuming you don't buy the put options back to close out the position, you are forced to buy another 5000 shares of WIND for $87,500, so now you have 10,000 shares of WIND with an average cost basis of $10.5 per share....at that point you can turn around and sell your shares for a nice profit (if WIND is above $10.5 per share) or if WIND is under $10.5, you are losing $10,000 for each point under $10.5. If the stock goes to 0, you have lost $105,000, so there is some risk, but the risk/reward looks a heck of a lot better than a 6-month CD at the local savings-and-loan. What do you think of this strategy, Mark ???? Thanks for the input. Jimbo.

To: Mark Brophy who wrote (4820)	4/9/1999 12:58:00 AM
From: Jimbo Cobb	Read Replies (1) \| Respond to of 10309

Just looked at the Nov 22.5's...I like 'em even better...if you buy the stock tomorrow, turn around and sell both the calls and puts (Nov. 22.5's), you can raise approx. $12.75/share, so your out-of-pocket cost is around 0.75 per share....you can pick up 5000 shares of WIND for $3750 total (assuming of course, you have the proper buying power on margin required to sell all of those naked put options)...if WIND is above $22.5 in November, your 5000 shares get called away for $22.50 per share, or $112,500 total, for a 30-to-1 return on your upfront out-of-pocket investment for 7 months....worst case is you are forced to buy another 5000 shares of WIND for $22.5 and you have a total of 10,000 shares of WIND with an average cost basis of $11 5/8 per share. Your average cost per share ends up being a little higher this way if WIND performs poorly, but your profit potential is even higher...this deal looks a little too sweet for me to pass up...how about you, Mark ???? Jimbo.

To: Mark Brophy who wrote (4820)	4/9/1999 7:43:00 AM
From: Mike Milde	Read Replies (1) \| Respond to of 10309

<< but I can't abide by the company giving out confidential info to preferred investors >> Hundreds of people (developers, managers, and technical writers at both Wind River and Xact; developers and managers at customer sites, etc. etc.) knew about this product delay. It's not really fair to assume that Wind River management leaked information. Mike

To: Mark Brophy who wrote (4820)	4/9/1999 9:46:00 AM
From: Richard Knox	Respond to of 10309

Mark, you made an excellent decision to invest in WIND on the eve of what will probably be a strong bottom for the stock. Why ruin that great timing because of a little paranoia? Granted, word leaked out about the missed quarter, but why assume it was a malicious leak? Anyway, you got in AFTER all the news was over-reacted to and the stock was cheap. Have confidence and trust your instincts. You were right on about it. You won't make money day trading over the long term.