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Technology Stocks : LUMM - Lumenon Innovative Lightwave Technology Inc.
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To: Fred McCutcheon who wrote (1298)12/16/1999 7:41:00 PM
From: russet  Read Replies (1) of 2484
 
I've been told by brokers that it is quite common for holders of PP's to sell the stock they hold short if the stock goes on a run. They use their PP shares to cover the short,...thus it is called a covered short. Other people have told me these "covered shorts" do not show up in short reports published by news media.

A PP holder doing this can lock in a profit if a stock runs up to higher levels. When the trading restriction is removed, they can use their PP stock to cover the short, if they haven't done so already by buying in the open market.
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