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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: kaka who wrote (174682)	4/13/2005 10:31:02 AM
From: GVTucker	Read Replies (3) \| Respond to of 176388

kaka, RE: Dell's been trending down since beginning of year. Lots of long puts (dell, index) held by retail customers are closed for profits and these go to arbs and MM. These professionals hedge their long puts with long stock. As expiration draws near they unwind holding which includes selling their long stock. This selling drives Dell down. Rebound next week! Sorry. An arb or market maker long the stock and long a profitable put would never sell the position. In the money puts trade at a discount to intrinsic value this close to expiration. Rather, he'd wait until expiration and exercise the put. This might be an issue for the at-the-money put, though. In this case it would be the 37½ put. Total open interest is about 17,500 contracts. For Dell, this would comprise an hour or so of trading, hardly enough to drive the stock. A stock will trend toward a strike price right before expiration, but that is an issue only a couple of hours before options expire, not a couple of days.