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Strategies & Market Trends : Roger's 1997 Short Picks

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To: Roger A. Babb who wrote (3949)7/13/1997 10:35:00 PM
From: Craig Gordon   of 9285
 
Thanks for setting up this thread and your continuing brilliant input.

I have been researching AOL and YHOO to determine which will be the best downside play when they become broken stocks.

IMHO YHOO's price is totally insane. Last qtr 13 Mil of sales and a market cap of about 1Bil 800 Mil. At least AOL is a company with sales, even if it lacks profits. YHOO has neither in meaningful amounts.

I like to keep risk limited. AOL has options, YHOO doesn't. The market makers won't be able to hedge their positions with options in YHOO.

How do you feel the speed of change in the volatility of YHOOs price will be affected by the lack of options? If it drops will it drop faster or slower? (due to the lack of options) (versus an AOL type situation with options)
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