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Technology Stocks : 3Com Corporation (COMS)
COMS 0.001300.0%Nov 7 11:47 AM EST
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To: mr.mark who wrote (36458)11/21/1999 4:00:00 AM
From: Mang Cheng   of 45548
 
Cramer's take on the rise of coms and other companies :

"Calls on plain old stocks just rocketed this month,
causing a lot of the upside pressure. The open interest in
Hewlett-Packard alone might have blown short-sellers away.
Same with 3Com (COMS:Nasdaq), EMC (EMC:NYSE),
Oracle (ORCL:NYSE) and Global Crossing
(GLBX:Nasdaq), to name four others I saw some
option-squeezing in.

(Good news in expiration week shocked all of these
stocks and caused terrific squeezes. Here is how that
occurs. There are always people who are short calls to
bring in income. If you were short the Hewlett-Packard
November 90 calls with three days to go and the stock is
at 77, you aren't thinking you have to buy those back.
You are thinking they are going to go out worthless.
That's just human nature. Maybe you sold them for a
dollar and you figure, what the heck, why pay a 16th plus
commission to bring that sucker in. It's going to be at
zero on Friday. Suddenly the stock blows through the 80
and 85 strikes, you panic and buy common to make it so
that you are "covered" or you buy back the call which
can also cause upward pressure as call buying impacts
the underlying common. This out-of-the-money to
sudden in-the-money can really get stocks rocketing, as
we saw in all of these cases. )
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