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Biotech / Medical : RXSD Rexall Sundown
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To: cadson who wrote (32)7/16/1998 2:36:00 PM
From: The ChrisMeister   of 327
 
"...are they hedging the short if they have to cover?"

I believe that could be part of it. Calls can be cheap insurance against getting steamrolled if you're short. But 3800 calls only covers 380,000 shares, or something like only 4% of the outstanding short shares. So maybe the shorts aren't all that worried. Hard to tell because some of the open interest could be just your average everyday wannabe longs. Also, options can be a wash, since the option seller is in something like the position of a short and would have to either buy the call back or the stock if we were to go higher (except for covered call writers who just lose their stock).

What did the company say in response to your questions? Companies usually don't have much to say about shorts unless there's been an article somewhere.

TIA

ChrisMeister
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