Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: mishedlo who wrote (126380)	9/30/2001 6:07:06 AM
From: sun-tzu	Read Replies (1) of 436258

It's a move based on simple risk/reward. The recent downside blowout removes the high percentage opportunity on the short side. As far as increasing their call exposure, that is far to risky since the fundamentals are as bad as they were in March, 2000. barra.com Remember, as the put position increases, the brokerages must short stocks to hedge since they sold the puts in the first place. That's the precise reason that closing put options is so bullish. Not to mention the very essence of a "short squeeze". My point is this: the removal of the huge, net put option positions, and the inherent short stock hedge, lessons any chance of a rally as there are no shorts to cover to create that buying frenzy. IMHO this ship is taking on water. Tax loss selling, redemptions and European repatriation are gonna crush this market over the next four weeks. (~)^(~)

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