HI Chen: The main one to watch is the big money leaps WANAZ, it
has 11759 in the OI..WANAE had over 4,500 but went down to 730
around the 7th. These long term calls were in place ever since I
started tracking..they were likley bought back in Oct when she
was low and for 2 or 3 dollars..these positions are not exactly
long positions..they are likly being used to cover a short seller.
The way that works is you buy leaps when they are cheap, then you
hold them even after you are ahead, as you use them to cover your
short sells, no one with any sence shorts a stock with out being
covered aginst a squezz play. With these leaps in place you can
short the stock, every time she looks like she is peaking, and
do that over and over, and it's much cheaper to do that than it
is to play just options. To keep the value up on your calls as
much as you can each time you short, when you buy back you buy
more stock than you sold , using the profits , at this point you
are accumulating stock with the profits, this accumulation also
lets you short more than just you call position, you now have
some stock you can short agnst the box..the box is used with the
acculated stock as that stock also helps your margin account, were
as if you just sold it out right you would be paying more
interest on your margin account, hence the box.
Working it this way your actully bringing up the support level
each time you buy back with the profit of the short sell, this
in turn creates an uptrend, and your calls get more value.
When your ready to cash in, and think you have milked her for
just about the limit, you close ( sell your call position first )
then you sell the accumulation..you might short it one last
time aginst the box, and buy back..if you think it is worthwhile,
and then dump out..anyway keep your eye on the WANAZ..it'l happen
fast when it does. And I might not be looking..that WANAE was
closed out the day before she took her 4-1/8 dive, and I missed
seeing it. Calls are not always bullish..short sellers use them
a lot. Keep in mind the hiiden spread on options ( what the MM
don't show ) is generally 1/8 of a point both ways..and the
commisions are higher on ops than short selling..so with some
well placed leaps..that you can use for cover you beat the hidden spread, cut way down on commisions and can use them over
and over as protection aginst a sqeezz play. It takes planing to
set it up..and finding a stock that is suitable for that type
play..AOL appears to be one of the best I'v seen..had I been
tracking her back in OCT I may have tried the same thing.
Here is a small list of some other stocks that had fast gaines,
and could have some shorts holding calls..AMES CLST CTAL DDIM
IMNX INVX..they likley bought the calls cheap, and can now short with
safty..and at the same time if they want to they can help support
the price, by acculation with profits untill they
get ready to cash in. You ever play a card game called Rummy ?
Jim
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