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

To: Exacctnt who wrote (21996)	5/3/1999 11:10:00 PM
From: Sir Francis Drake	Read Replies (1) \| Respond to of 74651

Robert, I bought puts to protect my MSFT position, but you are very right - it is a question of when to cash in the put. I wanted to see if 80 would hold. Personally, I didn't believe it would, but there are always the unexpected spikes, like when there was a tech rally in the wake of IBM's earnings, and MSFT zoomed up to 88+. The second issue is connected with how long this weakness will persist. It is my opinion that we are due for many months of this. First, we are entering summer and early fall - not the strongest times for the market. The trial will only get uglier. And then there is the stupid Y2K concern - people might take $ out of the market. In this longer-term weakness scenario, it becomes a question of not just when to cash in the puts, but how to balance the purchase of a new put against the premium. I can sell if I feel a bottom is here, but it's awkward to time against the time premium of a new purchase. Longer term options might be the solution, but it's all a question of balancing things - I'll collect more, but pay more out in a new option purchase. I guess the solution is to trade these puts more actively, but I've got may hands full trading as it is, without adding to the headache of going through hoops to protect my long-term MSFT holdings. If I didn't believe in MSFT long term, and more importantly, if I didn't have huge capital gains issues to deal with, I'd have sold all at 95 - when it kept failing to break 95, to me that was a signal to sell, and I did sell my trading chunk of MSFT which I bought as a split play. But I'm stuck with my long term MSFT. No choice but to protect it now. I just wish I didn't have the feeling that this is going to be a long ordeal.