Microsoft (Symbol-MSFT) - whereto
- Bylo Selhi
- Veteran Contributor
- Posts: 29493
- Joined: 16 Feb 2005 10:36
- Location: Waterloo, ON
- Contact:
IBM has been offering this sort of usage-based pricing on their mainframes for at least the last decade. While the corporate enterprise market may be different from consumer PCs, the concept does work and can be a win-win. In any case consumers are used to this sort of thing already, not only with ATM "convenience" fees as kcowan points out, but also, e.g. long distance and cellphone airtime, pay-per-view TV, etc.IdOp wrote:Microsoft specs out 'pay as you go' PC scheme.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
- IdOp
- Veteran Contributor
- Posts: 3873
- Joined: 16 Feb 2006 11:27
- Location: On the Pacific sea bed, 100 mi off the CA coast.
- Contact:
All true, but if this becomes a part of the mainstream Windows desktop, how many FWF WIndows users would get excited about this, and how many would draw the line in the sand?Bylo Selhi wrote:... can be a win-win. In any case consumers are used to this sort of thing already, not only with ATM "convenience" fees as kcowan points out, but also, e.g. long distance and cellphone airtime, pay-per-view TV, etc.
ADDED: Time for a poll?
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
Thought of putting this under Feb humour, but it is factual. Microsoft wants refund from some laid-off workers. Note also that today Microsoft announced that those overpaid can keep the extra.
Makes me wonder, since this was the first mass layoff from Microsoft, was this a beta of Microsoft Layoff, or was it a .0 release of Microsoft Layoff
Makes me wonder, since this was the first mass layoff from Microsoft, was this a beta of Microsoft Layoff, or was it a .0 release of Microsoft Layoff
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
- Bylo Selhi
- Veteran Contributor
- Posts: 29493
- Joined: 16 Feb 2005 10:36
- Location: Waterloo, ON
- Contact:
Well today is a Tuesday(*)Peculiar_Investor wrote:today Microsoft announced that those overpaid can keep the extra
Hmmm... I wonder if this is will also be included in MSDN or MAPS subscriptionsMakes me wonder, since this was the first mass layoff from Microsoft, was this a beta of Microsoft Layoff, or was it a .0 release of Microsoft Layoff
(*) for those who don't appreciate the significance, Patch Tuesday.
Sedulously eschew obfuscatory hyperverbosity and prolixity.
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
From WSJ, In a First, Microsoft Readies Bond Sale. As an investor and shareowner, I'm left to wonder why a company that has $25 Billion in cash would need to tap the bond market for upwards of $15B for "generic" purposes.
I'm sure the speculation will continue on the real purpose and whether a big acquisition is in the works.In its prospectus, Microsoft said it will use net proceeds from the sale for general corporate purposes, including working capital, capital expenditures, and repurchases of its capital stock.
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Oh my. Tomorrow ...
Microsoft Profit Falls 29% as Slowdown Hurts Sales -- reported July 23, 2009 after markets close
Microsoft Profit Falls 29% as Slowdown Hurts Sales -- reported July 23, 2009 after markets close
Microsoft fell $1.82 to $23.74 in extended trading, after closing at $25.56 on the Nasdaq Stock Market. The stock jumped 29 percent last quarter.
“The search for truth is more precious than its possession.” Albert Einstein
- Norbert Schlenker
- Veteran Contributor
- Posts: 7960
- Joined: 16 Feb 2005 09:56
- Location: An Argument Surrounded By Water
- Contact:
- Shakespeare
- Veteran Contributor
- Posts: 23396
- Joined: 15 Feb 2005 23:25
- Location: Calgary, AB
- IdOp
- Veteran Contributor
- Posts: 3873
- Joined: 16 Feb 2006 11:27
- Location: On the Pacific sea bed, 100 mi off the CA coast.
- Contact:
But, but, but Windows 7 is far more streamlined than Vista.
I liked this quote in the article:
I liked this quote in the article:
Steve Ballmer wrote:Vista was not a mistake, Vista was controversial.
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
Good thing that you didn't, Q1 numbers are out. EPS was $0.40 vs street estimate of $0.32. MSFT is up 8% in pre-market.Norbert Schlenker wrote:News from the front.
I'm stuck for a few days in Bellingham, WA. If the local Best Buy is any indication of retail interest in Windows 7, I'd be shorting MSFT.
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
Re: Microsoft (Symbol-MSFT) - whereto
A very interesting read from an ex-insider, Microsoft’s Creative Destruction. As a current Microsoft share owner, it gives me food for thought about the future growth prospects of the company. The earnings potential and cash flow still remains great, but the lack of innovation is worrisome. I feel that the day is coming that Microsoft may become the first technology "utility" company, slow revenue and earnings growth, with a healthy dividend yield. Who would have thunk it?
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
Re: Microsoft (Symbol-MSFT) - whereto
As expected there is a response, The Official Microsoft Blog: Measuring Our Work by Its Broad Impact.
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
Re: Microsoft (Symbol-MSFT) - whereto
Am I the only one here with an interest in Microsoft as an investment? Maybe a changing of the guard is necessary, FT.com / Comment - Ballmer’s window of opportunity to prove his worth. 2010 was a tough year for the stock and the company, but it has been done before, for example IBM's turnaround of the '90s to today, same name, much different company.
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Re: Microsoft (Symbol-MSFT) - whereto
I'm short the following MSFT puts (i.e., bullish):Peculiar_Investor wrote:Am I the only one here with an interest in Microsoft as an investment?
April 2011, strike $25, 4 contracts
April 2011, strike $29, 2 contracts.
Re: Microsoft (Symbol-MSFT) - whereto
Adrian, you are way ahead of me here. I'm strictly a long and hold type and have little experience beyond that. Thus I don't really understand what you posted.adrian2 wrote:I'm short the following MSFT puts (i.e., bullish):Peculiar_Investor wrote:Am I the only one here with an interest in Microsoft as an investment?
April 2011, strike $25, 4 contracts
April 2011, strike $29, 2 contracts.
Can you explain what you did with MSFT above, why, what frictional cost and what your upside gains and downside loses could be?
“The search for truth is more precious than its possession.” Albert Einstein
Re: Microsoft (Symbol-MSFT) - whereto
But not bullish enough to be [url=gamma.http://www.investorplace.com/5759/long-gamma-position/]long gamma.[/url]adrian2 wrote:[I'm short the following MSFT puts (i.e., bullish)
newguy
Re: Microsoft (Symbol-MSFT) - whereto
A put contract (American style) gives the owner the right, but not the obligation, to sell the underlying security at any time up until the expiration data, for the strike price. The call is similar but gives the right to buy.George$ wrote:Adrian, you are way ahead of me here. I'm strictly a long and hold type and have little experience beyond that. Thus I don't really understand what you posted.adrian2 wrote:I'm short the following MSFT puts (i.e., bullish):
April 2011, strike $25, 4 contracts
April 2011, strike $29, 2 contracts.
Can you explain what you did with MSFT above, why, what frictional cost and what your upside gains and downside loses could be?
Market traded options are generally not issued by the company, they are created "out of thin air" by somebody who wants to "write" them. I usually like to be a writer of options, not a buyer.
Stock options are traded in units called a contract. Each contract is for 100 shares.
When you write (i.e., somebody buys an option you offer for sale), you implicitly would get a negative position (the buyer obviously gets a positive number of contracts, the seller a negative one).
The most familiar option position is called "covered call". You own the stock, say MSFT, and decide it's quite high (remember those days?) not sure if it's going higher or just treading water, and want some extra income out of it. You sell (write) a call on it, giving the buyer the option to buy (call) it from you at the strike price, up until the expiration date. This is considered as one of the most conservative positions, because the call option itself won't make you lose money; the only way the option is going to be used if if it's going to be "in the money", i.e., MSFT exceeds the strike price. You're happy you've collected the option premium and content you've sold MSFT for a good price.
Finally, I've come around to my strategy: I'm short (I've written) MSFT puts.
It sounds scarier, but the fundamental theorem of options is one I like to remember using the acronym
British Columbia = Standard & Poor's
B + C = S + P
Bond + Call = Stock + Put
Covered call = Stock - Call
which by the above formula S - C = B - P
which means a cash covered put has the exact risk reward characteristics of a covered call.
In layman's terms:
If MSFT, on the third Friday of April 2011, ends under US$25, I get assigned a total of 6 contracts, meaning I have to buy 400 shares at US$25 and 200 shares at US$29, for a total outlay of $15,800.
If MSFT ends between $25 and $29, I get assigned 200 shares at $29, for an outlay of $5,800.
If MSFT ends above $29, all my MSFT puts expire (go to waste for the holder / buyer).
From this you can immediately see I'm bullish on MSFT: I hope / would like for MSFT to be above $29 in 3 months.
Any potential big drop in MSFT, I'm exposed as much as a holder of 600 MSFT shares.
What I did not mention yet was the initial premium collected by me when I sold the puts. For the $29 ones, it was over $4, while for the $25 ones, at a different moment in time, it was about $3.
So my true break even price for MSFT in April is $25 (= $29 - $4) for the higher price puts, and $22 for the lower price puts.
The most I can make is for options to expire unused, that is to make
$4 x 400 shares = $1600 and
$3 x 200 shares = $600.
Does not sound as much, but remember my exposure to MSFT is only $13,600 (assignment - initial premium collected).
So, as newguy has remarked, I'm not terribly bullish, but bullish enough to risk buying MSFT if it drops below the thresholds, which is kind of a Bylo strategy.
As for frictional costs:
At TDW, with > 50k in household assets, one qualifies for option commissions of $9.99 + $1.25 times number of contracts.
If assigned (forced by the other party to live up to your word and hold our end of the bargain), commission is steeper at $43.
I try not to be assigned; usually if there is enough time to expiry and the option is not too deep in the money, there's enough time value so that it's very unlikely to get an early assignment. If time is running short to expiry and the stock has gone against me (it dropped through the strike price), I'll usually buy my puts back and sell another batch with a lonegr expiry, thus collecting more option premiums.
Feel free to ask for more jargon clarification, I know I've skipped a few unexplained terms but this post is already quite long.
Re: Microsoft (Symbol-MSFT) - whereto
Thanks Adrian. Much appreciated.
“The search for truth is more precious than its possession.” Albert Einstein
Re: Microsoft (Symbol-MSFT) - whereto
Adrian:
How much margin or cash on hand do you have to have?
If Old Softie has a black swan event(very unlikely) and was to drop what kind of balance are you required to have?
How much margin or cash on hand do you have to have?
If Old Softie has a black swan event(very unlikely) and was to drop what kind of balance are you required to have?
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
Re: Microsoft (Symbol-MSFT) - whereto
From CBOE's margin calculatordeaddog wrote:How much margin or cash on hand do you have to have?
If Old Softie has a black swan event(very unlikely) and was to drop what kind of balance are you required to have?
select "Short Put"
enter, for example (have not checked the up-to-date prices):CBOE wrote:Initial margin requirement:
100% of option proceeds, plus 20% of underlying security value less out-of-the-money amount, if any
minimum requirement is option proceeds plus 10% of the put’s aggregate exercise price (number of contracts x exercise price x $100)
proceeds received from sale of puts(s) may be applied to the initial margin requirement
after position is established, ongoing maintenance margin requirement applies, and an increase (or decrease) in the margin required is possible
# of contracts = 2
strike price = $29
option price = $4
underlying price = $27
Hit Calculate
=> Margin requirement: $1,880.00
# of contracts = 4
strike price = $25
option price = $2
underlying price = $27
Hit Calculate
=> Margin requirement: $2,160.00
so my total margin requirement is currently around $4k (it will be more if MSFT drops and less if it rises).
Or, the quick and dirty:
remember my exposure to MSFT is only $13,600 (assignment - initial premium collected)
MSFT eats up 30% in margin (it provides 70% loan value), so margin ~= 30% x $13,600 ~= $4k
-
- Newcomer
- Posts: 1
- Joined: 22 Dec 2010 10:51
Re: Microsoft (Symbol-MSFT) - whereto
What happens when microsoft pays dividends? How does this affect your account and how is the transaction processed?
Re: Microsoft (Symbol-MSFT) - whereto
An option holder or buyer does not get paid or pays dividends, IOW, no transaction appears in the account.investing_goon wrote:What happens when microsoft pays dividends? How does this affect your account and how is the transaction processed?
However:
- current option prices are affected when stocks go ex-dividend;
- any (big enough) special dividends, as well as stock splits result in option strike price adjustments to make the option investors impervious to unforeseen events, other than "usual" stock price movements.
For example, when MSFT paid a special $3 dividend, option strike prices were adjusted by $3 downwards.
If MSFT was to split 2:1, option strike prices would "split" accordingly.
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
Re: Microsoft (Symbol-MSFT) - whereto
An interesting occurrence today, Microsoft's Q2 earnings were out before the markets closed. Microsoft Release Obtained Early by Market-Data Firm - Bloomberg
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
- Peculiar_Investor
- Administrator
- Posts: 13267
- Joined: 01 Mar 2005 14:52
- Location: Calgary
- Contact:
Re: Microsoft (Symbol-MSFT) - whereto
Microsoft Agrees to Purchase Skype for $8.5 Billion to Add Internet Calls - Bloomberg. It will be interesting to see how this one evolves, I'm not sure that free call users of Skype, such as myself and my family, will be overly happy with this news, particularly those that run on non-Microsoft OS'es. At least Microsoft has found some use for some of it's cash hoard.
Apparently Canadian's will benefit, CPPIB to collect big windfall as Microsoft buys Skype for $8.5-billion - The Globe and Mail
Seems like the M&A investment bankers and lawyers are getting back to work.
Edit: Added CPPIB story link.
Apparently Canadian's will benefit, CPPIB to collect big windfall as Microsoft buys Skype for $8.5-billion - The Globe and Mail
Seems like the M&A investment bankers and lawyers are getting back to work.
Edit: Added CPPIB story link.
finiki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams