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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: changedmyname who wrote (11818)	6/15/2001 5:54:24 PM
From: Emile Vidrine	Respond to of 15615

Who benefits the most from the collapse of the stock price? Shorts sellers and put buyers. Mr. Winnick establish a collar on 10 million shares of GX. This means he sold calls and bought puts. The greatest gain from such a collar is almost certainly a collapse of the stock price. (The only exception to this would be a far out strike price for the call) Assuming the strike price for the puts were 12.5 or 15, and the calls 17.5, then the collapse in the last few days would have greatly reduced the calls and increased the puts to $4 to $6. The calls could have been bought very cheaply and Mr. Winnick's pocket some $40 to $60 million dollars and still have all his shares. Mr. Winnick had a lot to gain by withholding information and giving off negative vibrations at the conference. The maximum performance of the collar could only be realized with a collapse of the price. I imagine Mr. Winnick either sold his puts and bought back his calls today, and if not we may be in for another beating tomorrow. Any information on the status of his collar would be greatly appreciated. If the call and put volume suddenly decreases by 100,000 contracts, we should suspect that Mr. Winnick has cash in his chips.