Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 206.70

-1.2%

1:42 PM EST

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To: Thomas M. who wrote (24044)	11/19/1997 4:54:00 PM
From: pae	Read Replies (4) of 61433

re Options Conspiracy Theory: if those short the 30 puts (probably largely MMs?) shorted the stock north of 30 to hedge their options exposure; to unwind they can now either a) buy back the puts or b) take delivery of the stock at a price of 30 when exercized. If they buy in their puts, they then will probably at least consider covering the underlying shorts, or they will roll out to short the December 30s. If they take delivery and then net out the equity positions then short interest will decline w/o buying pressure. So should we write off some of the rallies of the past week (assend up when other networkers down) to un-winding (buy in puts, cover equity shorts)? And expect more of same tomorrow? But then expect winding (un-un-winding) for december beginning next week? Also, if those short naked puts get exercized and end up with the stock monday, they may sell immediately especially if under margin pressure. How many derivatives can dance on the head of an equity? How's this sound to the options semi-pros out there? Cheers!

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