Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Biotechnology Value Fund, L.P. -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (3504)	6/10/2003 4:47:22 PM
From: scaram(o)uche	Respond to of 4974

>> Now that's being upfront about it. Wow. << Good to see. Particularly, given the thread that you've commented in.

To: tuck who wrote (3504)	6/17/2003 12:46:18 AM
From: Doc Bones	Read Replies (2) \| Respond to of 4974

Do you have much feel for how much convertible bond buyers typically short the stock? Some when they buy the bonds, and some when the stock moves, especially up, I guess. As Peter says, their primary need is insurance against the stock going to zero, so they may buy some kind of leap puts. The market maker who sells you the puts usually shorts stock within seconds to hedge his position so that he is "delta-neutral," so a small change (delta) in the stock has little or no effect on the mm's position. Convertible buyers who see themselves as investors in the company would tend to hedge less, but no doubt hedge funds who are big buyers are, like the option mm, primarily interested in reducing risk to make a small gain, and would be active shorters. Interesting to have the company itself buy from the short-sellers. A company buying it's own stock always tends to increase risk / leverage, but they may prefer it to 'public' shorting. Doc