John: It doesn't need to be so sinister.
There are other reasons for volume. Take a look at the June NT options. With the news so sudden, two whole strikes of PUTS went in the money, and two whole strikes of calls fell out. Way off max pain! This exposed 17,000 PUT contracts and wiped out 14,000 call contracts for a total of 3.1 million shares. Of which only 3000 contracts changed hands. That means a change of almost 3 million shares more than was expected had to suddenly take place.
1/6 of normal volume "suddenly" being required makes a lot of shares change hands in very short period of time my friend. I imagine all houses fielded that volume! CBOE must have been going nuts!
An unsecured credit facility is just that. It might have been hedged, but nobody holding that facility is going to hedge by buying NT shares! Rub a few neurons together first: if NT defaults it's not likely that the shares would go up. So whoever holds that credit facility benefits by the highest share price possible until repayment. Not the other way around.
As to JDSU/NT? Well, JDS is NT's customer for one thing. When your customer tells you "please shut off the supply taps" that would be a good time to announce a shortfall in revenue. Second, I saw posted here that NT owes JDS in the event certain order volumes are not achieved, and who knows what notice provisions are wrapped up in that deal. There are all kinds of other possible reasons for co-incidence. One of which is coincidence.
Why does conspiracy happen to be the one you grasp onto?
Finally, to your assertion of a bull market on NASD, I think you are looking at the chart upside down. Trend down and to the right with occasional blips up is not bull. It is "BEAR".
Nevertheless, our deciple friend is right to close half of his position. We are within $10 of the bottom, for sure.
John. |
