Hi Barry; Wow..now I feel lucky I was not trying to play her short
at this time. They will likly add some option strike prices in a day
or so, the calls closest or just in the money seem to be the best
to get to cover a short position, depends on the demand.
If you say get aug 75s at 2 and short at 74-1/2 it cost you 2-1/2
for the short position and she have to come back to 72 before you
break even..( if the calls were to be worthless , doubtful that
would be the case untill close to ex date ) but that's academic
because they don't have 75s yet. But if they did you would likly see
that puts would cost more. Just the same you can figure out the
size of the risk before you leap.
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I'v decided to save some dry powder and won't shoot untill one
of two things happen..(1) the large Jan98 32.5 call position
sells off, OR (2) I get a report that shows 50% or more of the
shorts have been squeezed out.
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You can seldom make money shorting a stock every one else is shorting
I'v got to much data that shows the more a stock is shorted the
higher it goes untill about half or more of the shorts give up.
The brokerage houses etc see to this, and are the biggest
shorters, but they also have the inside data; trying to beat them
is a no win situation, catching the shirt tail is all you can
do and that's not always easy to do. Chances are your own brokerage
is the one your in compitition with when you short, and they know
how many "buy stops" they got and what it will take to pick them
off..and at what percentage the buy stops have to get to, in
order for them to momentum buy her up, trigger the stops..then
sell right back to them..it's like shooting fish in a barrel.
The thing is the higher she goes the more shorts run at her,
the more they walk into the trap, this is not going up because
of investors..this is short sell momentum.
If some fund goes to take profits and places an order , the
brokerage houses see it, then they don't buy her up, but dump any
long positions they have before exicuting the order and let all hell
break lose. I do computer work for a guy ( I don't want to name
the brokerage or him ) but he worked the trading floor for 2
years, hey they buy and sell stock on the NYSE in a way that
circumvents the so called bidding system..and turns it back to
something like the naz on any of the larger shorted stocks,
in effect they become market makers by proxy, all the ra ra
of how the NYSE uses specialist and doesn't have market makers
is just so much window dressing.
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Jim |
