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Technology Stocks : ocom breakthrough technology

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To: oki kwon who wrote (967)	7/25/1999 12:12:00 AM
From: Q.	of 994

oki, the best play in town is to short 3 shares of OCOM and go long one unit of OCOMU. Doing this at yesterdays close would cost you net only $0.68, and it will buy you 2 warrants with an exercise price of $4. i.e., it costs you $0.32 to synthetically buy a warrant. The stock is trading at 4 11/16. That means that the warrant is in the money by 11/16 = $0.68. In other words, Mr. Market is giving the warrant a negative time value. What a bargain. Whoever said that the market is efficient? This arbitrage position has almost no downside risk, yet a considerable upside potential. It hardly matters what goes on with the underlying company.

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