Hi: well most shorts have bought calls some were back, for them
if the price goes to the moon they can call it at the strike
price of their calls, ( they lose their call money )...the
squezz comes when the owners of the stock want it to..like
they take it off margins...u see shorts sell borrowed stock,
but the people who lend the stock can demand it back at any time.
And often if they they can force the short to buy ( to pay back )
they take their stock off margin..and off the lending shelf,
then the shorts have to buy or exersice their calls
to pay back, which does the same thing..a lot of this today,
may not be all short covering..I agree with Stephen..a lot of
monentum players jumped on, they will sell as soon as they think
it hits top..so she hit top and drop back as soon as monentum
players start selling..but not before..could go on up..
I notice not a lot of faith in her rise today..as put premiams
did not fall in respect to the rise, will take another day
or two before premiams are not so high..calls to cheap in respect
to puts right now..
Any way unless your very rich don't short a stock without having
calls to cover your position..as you can get sent to poor house
that way fast, but with calls to cover short sale..you can limit
your risk. Most of the big time short sellers bought cheap
long term calls a long time ago when she was down in the 20tys..and they use them calls as insurance untill they expire, many calls at
30 to 35 were bought back in oct all the way to jan98..thoes short
sellers will play her untill she drops below their strike price,
if they get sqeezed..have to call the stock at that price, but
do not get to keep her as she is borrowed, so they in reality
lose call money..but how many times they make a bundle before
being squezzed..when all the old calls are used up the volume will return to normal..consider that many institutions own this
stock..if she hits certain price then one or two may sell, then
all hell break lose..and she go to 10 or 15.
you see 3.1 m volume today heck some day it over 5..then drop
way down on days nobody play..it's like a big poker game right
now..who got the lowest strice price on calls holds the
aces..we just sideliners trying to guess their next move..
jim |
