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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (348)8/7/1996 6:00:00 PM
From: Knighty Tin   of 132070
 
Mark, Back to yesterday's Big Boys selling calls question. The key is that for a big institution to sell calls, the brokers have to buy them. The exchanges are next to useless on large orders. The broker wants to steal the commission, but they don't want the risk of long calls. So, they sell a synthetic call, which is short stock, short put. All of this shorting of stock and calls does have a temporary dampening effect on the stock, though the short put ameliorates that a bit. MB
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