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Technology Stocks : NEXTEL
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To: Ben Wood who wrote (4796)2/23/1998 12:56:00 PM
From: Bubba  Read Replies (1) of 10227
 
To Ben Wood: The STRYPES are a type of convert. All converts have an "option" imbedded in them. Usually a call option on the underlying company stock. Most large banks and securities firms have option arbitrage and covertible arbitrage desks that look for "mispricings" in the market. They seek to dis-aggregate the pieces of a security into the underlying and the "option" and take a long or short position in the peices or the whole to exploit a mispricing.

Strypes are a little different and each securities firm that issues these things has a different acronym whether it be PERCS or whatever.

The important thing to know is that any company that issues securities on a regular basis has these desks working on arbitrage possibilities.

NXTL is in the market so often that I can only guess that a meaningful # of the shorts are arb desks. n.b. An issuance of stright bonds or an upcoming call of existing bonds will get these desks interested also.

Bubba
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