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Technology Stocks : WDC/Sandisk Corporation
WDC 163.33+3.5%Nov 28 9:30 AM EST
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To: Bill Zeman who wrote (5189)3/24/1999 3:35:00 PM
From: Art Bechhoefer   of 60323
 
Bill,

If there was option activity last week, it probably would have been the sale of covered calls, a strategy that protects gains in the stock. If this happened, the data on call transactions would suggest to some investors that people were also selling the common stock, even though very few shares might actually be sold. That's why the stock could drop precipitously on light volume. A covered call might expire worthless, at which point nobody knows what if anything is going on with the ownership of the underlying shares. My guess is that the overall weakness simply reflects fears about declining profits in the computer/technology sector.
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