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Technology Stocks : Compaq

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To: Gottfried who wrote (97566)5/3/2002 11:06:40 AM
From: Windseye   of 97611
 
Re Dell selling PUTs and buying CALLs... I believe this is called a "synthetic long" pair of option transactions. Interesting how in mid April I flagged a similar pair of transactions in CPQ for 50,000 shares... selling the JAN 2004 10 PUTs at $2.00, and buying the 15 CALLs at $.95. Works well in a rising market, but it is an enforced buy if the stock falls below strike minus premium.

I wonder why the smart guys at DELL didn't buy their way out earlier.

DJ
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