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Strategies & Market Trends : Tech Stock Options

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To: j g cordes who wrote (27636)11/1/1997 7:21:00 PM
From: AlienTech  Read Replies (2) of 58727
 
>>Let me ask you a hypothetical question. If IBM, for example and to fictionally make a point, knew on Monday that on Tuesday they would announce a massive stock repurchase, and also observed during the 550 point selloff that the 90 November puts were very high priced... went ahead and sold puts at close Monday or on the opening downdraft Tuesday, knowing they would announce the buyback 10:AM ... is that ethical? What if they waited to be sure the options were sold first, then said go ahead and make the announcement? What if they then bought the puts back for a huge profit Wednesday with the stock over 100 knowing they would suggest let say next week, that sales are average or just barely meeting expectations because of Asia. <<

I only know about INTC, They are the biggest sellers of calls/puts for INTC.. Why would you say this is unethical? This is how INTC buys back a lot of shares.. I think MSFT does this too but not to INTC's extend.
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