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Technology Stocks : Dell Technologies Inc.
DELL 122.55+4.4%Nov 21 9:30 AM EST
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To: Ken Beal who wrote (75094)10/28/1998 2:31:00 AM
From: PAL  Read Replies (2) of 176387
 
This was done about 5 months ago, Dell shorted the Nov 55 put (pre-split) big time. The option was way out of the money. The rationale was: Dell is willing to buy back a lot of shares at 55, but if the stock stays above 55, then Dell retains the premium which can be used for repurchase. Buying calls involves cash outflow and might lose all. On the other hand, shorting put generates cash flow. The strike price almost ensures keeping the premium. Should Dell do it again after Nov expiration, I will copy its strategy.
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