CompuServe Messages

Nobody ever talks about the Commodore options. Wonder why….. If you really want to play with Commodore, play the options. All the stock gets you is high buy-sell commissions and once a year a glossy photo of the ever-youthful Irving Gould. The stock does move up and down regularly, and (in l988, anyway) predictably. While the stock went from about $9 to $16 from Jan88-Jan 89, the options offered regular opportunities for 100-300% return over a fairly brief periods of 45-60 days. I use a technical charting program to follow the market and confirm its signals with mundane measures like the width of the smiles on the local dealers' faces and, in fact, the degree of optimism in this Forum. Lately, the dealers' smiles seem satisfied but not rapturous (Machines doing ok; software doing well). Anyway, I bet that some time between now and Sept 30, the stock will see $12-$13 a share. Let's say today I bought one option (NOV 12 1/2) for $62.50, giving me the right to buy 100 shares at $12.50 anytime from now until the third Friday in November. If the stock goes to $12.50 in Sept, the right to pay that same price in November will be worth maybe $100-150, at which point I will sell that option for a profit of somewhere between 65 and 150 percent. And I WILL sell it at $150 and not hang on hoping for more. If I put the same money into the stock and it goes from today's $10 to $12.50 I make only 25 percent. The risk is that if the stock stays at $10 from now to November, I lose everything, while the stockholder has lost nothing. Comment on today's action. The stock went to 9 3/4 by midday on low volume at which point steady buying in good sized blocks (one for 50,000 shares) moved in and pulled it back over 10. So unless that was Ethan buying the 50,000, 10 seems like a pretty solid floor for now. Oh, well, it beats the ponies. Rob.