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Technology Stocks : Identix (IDNX)
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To: brad greene who wrote (1165)5/22/1997 12:21:00 PM
From: Wendell Holmes   of 26039
 
Brad, you're right about 1000 contracts being 100,000 shs. Howsomever, how do we know if calls are uncovered or not? Suppose that most of the calls are owned by people who are hedging their short position? That would mean that they would call the stock away from someone to cover, reducing the short. Or it could be that the shorts are so aggressive they've written uncovered calls. Would you rather be short a 10 stock that couldn't go down much more than 5-6 pts or short a 30 day call that's 20% out of the money that could go to zero in a big hurry? Plus, your margin requirement for an out of the money call is nominal.But you have unlimited risk and limited profit. What I don't get is why there are so many open June 12.5's , when the price of the 10's isn't that much more for a huge safety gain. Go figger.
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