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Strategies & Market Trends : John Pitera's Market Laboratory
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To: John Pitera who wrote (5085)11/16/2001 12:11:31 PM
From: OX  Read Replies (1) of 33421
 
why is it that the buy-convertible/short-stock approach won't work in a rising stock price environment?
you're protected as well but will only make the yield. I think the problem is that, as Tim posted, that a lot of convertible offerings aren't for tiny retail investors.

the naked calls idea could really backfire. the convertibles aren't converted until a specific date right?
if the stock rallies significantly, you may be at risk of early assignment.
of course being short stock, you might lose your "borrow" too.
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