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

To: blankmind who wrote (21536)	4/24/1999 7:41:00 PM
From: taxman	Respond to of 74651

"they've never had a loss from doing this that I'm aware of" think of the loss (though it would be recorded as a capital transaction, i believe) they would take if they were to repurchase the shares they issued on the original public offering. regards

To: blankmind who wrote (21536)	4/25/1999 3:13:00 PM
From: Just_Observing	Read Replies (2) \| Respond to of 74651

How can MSFT make a loss on the Puts it sells If MSFT is selling the puts for a stock buyback then it can never make a loss. Even if the stock were to fall substantially, then it'll have just bought the shares at a higher price. Does MSFT engage in the risky strategy of selling more puts than the stock it wants to buy? Is MSFT is selling say 1.5 million puts (representing 150 million shares)and wants to buy only 100 million shares? Is MSFT allowed to sell excess puts and balance them by selling naked calls, thereby collecting time value premiums? 350 million a quarter is an enormous amount of money to make every quarter. However, a sudden 10 to 15% fall can wipe out many hundreds of millions if MSFT has sold excess puts. A fall of 20 points can wipe out billions of dollars. Any info on this matter will be appreciated.