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Technology Stocks : Aspect Telecommunications (ASPT)
ASPT 0.00010000.0%Feb 6 9:30 AM EST
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To: corporal spewchunks who wrote (554)11/18/1998 4:23:00 AM
From: Herschel Rubin  Read Replies (2) of 2018
 
John, thanks for keeping things lively here.

I read your MidTerm for ASPT 101 and it reminded me of sitting in class in Evans Hall (only you know where that is) and I was immediately overcome by nausea. Later, a case of premature dementia set in when I realized I didn't have time to formulate an intelligent answer to your question because it was late.

Now it is again late (one day later) but I would like to address the poignant questions you posed briefly: I would think the 3976 Put contracts were a hedge position by one of the conv debenture holders. Their puts are substantially in the money but they'll want to wring as much out of them when they expire. But whoever sold the puts (most likely the MM's for this size) also has an equal but opposite interest in stock appreciation.

Like you say, a tug of war. It will also be interesting to see whether the hedger who took out the puts initially will re-estabilish a put hedge position with a later expiration and a higher strike. After all, their hedge for their debentures vanishes this week.

My take on the resistance at $18 is that a lot of volume churned at about $11.50 to $12.50. The amount of volume turnover at low prices approximates the total amount of the Float (33M shares), if not more. So, we've essentially "reset the chart." The people who bought at those levels (including me) are sitting on a 50% gain in a few weeks. Profit-taking at current levels is to be expected and a healthy process on the way to $20. First, however, I would guess, ASPT may succumb to some year-end tax-loss selling in the next few weeks.

In fact, the whole market may be kind of strange in the next few weeks because there are many stocks with huge profits this year and many with huge losses. I would expect heavy crosscurrents as huge profits and huge losses are reconciled for tax purposes.
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