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Biotech / Medical : SABRATEK CORP (SBTK)
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To: R.E.B. who wrote (342)7/14/1999 1:22:00 PM
From: mod  Read Replies (1) of 487
 
R.E.B,

I believe Mr. Pink et al are known for their "patented reverse combo", which I believe involves purchasing out of the money puts while writing in the money naked calls. If the stock indeed then plummets, this can be very lucrative. Perhaps a practitioner of the reverse combo can explain it better.

There was huge volume in SBTK options shortly before and after Pluvia posted his "SBTK THE SKY IS FALLING" posts. SBTK did indeed fall for a while, making it hard to find an uptick to short, so my assumption is that many used options to take their short position.

I like your idea of buying SBTK and writing out of the money calls while the premiums are high. Were you looking at the Nov 30's at 4? That would give you about a 30% return in 4 months if called away. It could be coupled with buying a Nov 12 1/2 put at $1 for doomsday protection.

mod
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