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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Dennis V. who wrote (7147)1/16/1999 9:04:00 PM
From: Zeev Hed  Read Replies (1) of 27311
 
My bet is that large position was set as a hedge when the stock breached $10 sometime ago or was close to that price (a bullish spread). The buyer probably bought the 12.5 puts ) and sold the 10 Put, hoping that the stock stays between $10 and $12.5 at expiration, at which point he would have collected on the $12.5 and not have to buy back the (what he thought) would be worthless 10 puts. Since it did not work it cost him only the differential between the two positions on closing. These puts could also have been a simple hedge against a large position in the stock as protection against the pricing falling under the $10 range.

Zeev
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