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Microcap & Penny Stocks : PLCO Internet collectables, childrens toys...etc -- Ignore unavailable to you. Want to Upgrade?

To: Condor who wrote (882)	11/3/1999 7:27:00 PM
From: Israel	Read Replies (3) \| Respond to of 1296

short the common and go long the preferred that convert into common. The idea is that the common will go lower because of the dilutive effects of the preferred. Then since you are long the preferred, you cover your short on the common once the P's convert to common. Thats the gist of it.. Other factors play in.. but thats the general idea.. Israel edit.. this is with the assumption you shorted naked.. ie without borrowing the underlying position