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Technology Stocks : Ascend Communications (ASND)
ASND 197.70-4.5%2:50 PM EST
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To: Observer who wrote (22766)11/11/1997 11:14:00 PM
From: vegetarian   of 61433
 
>>M:
We talked about ASND's rise just prior to option expiry, how the large number of Oct Puts influenced the price rise when the rest of the techs were moving down. Now ASND is trading in the mid 20's. So the question is, all the mutual fund managers and others holding a big stake, why didn't they dump their shares into the rally knowing very well that it was just an abberation. Your thoughts please.<<

Two reasons I can think of are:
-those who are holding options as a hedge against their long term investment are not as much interested in making a profit from the option position as they are interested in protecting their investment.
They wil probably not care if the options expire worthless; they will most likely roll it into the next month.
If your question is why they did not sell their stock position itself that can have many answers including their seeing long term prospects (again depending on their buying price); everyone of us has their own reasons to hold stocks that are not doing so well ;-)

-those holding options on a speculative basis have not taken profits possibly because they expect the stock to rise next week in anticipation of options expiration; it will be interesting to see how it plays out this month.

Someone else may have a better explanation.
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