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Strategies & Market Trends : Floorless Preferred Stock/Debenture -- Ignore unavailable to you. Want to Upgrade?

To: lindend who wrote (997)	10/6/1999 10:14:00 AM
From: Larry Brubaker	Read Replies (1) \| Respond to of 1438

Linden, it is more complicated than that. Sometimes the floorless provisions are delayed for quite some time. Initially, it is in the bandit's interest to see the stock price go up. They want to establish their hedge at as high of a price as possible. If I were considering shorting a floorless, I would not want to take a position at a price less than 30% above the conversion ceiling. Then, I would watch to see where the tops are (where the bandits are probably hedging) before jumping aboard myself. In other words, automatically jumping into a short a week after a floorless is announced could possibly be very poor timing.