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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: saveslivesbyday who wrote (88719)	9/10/2007 3:56:58 PM
From: Smiling Bob	Respond to of 306849

Ben and Mister Sachs The economy is fine Apple sells Iphones

To: saveslivesbyday who wrote (88719)	9/10/2007 8:21:05 PM
From: Think4Yourself	Read Replies (2) \| Respond to of 306849

BZH, HOV, and WCI are all heavily shorted. I am long these three going into the fed meeting, and short all the rest.

To: saveslivesbyday who wrote (88719)	9/14/2007 8:55:00 AM
From: GraceZ	Respond to of 306849

Who's buying this crap?? My theory is that once wounded stocks get down to a certain level where BK is a possibility the swings of buying and selling is driven in large part by options. On the way up, and on declines at higher levels, large institutional holders sell covered calls to insure against their profits disappearing (and make a little extra) but this doesn't effect long buying because the calls are covered by previously existing positions. As the price drops to these levels no big institutional holder has large long positions to sell calls on, the big players all have large short positions with a large amount of profit to protect. If there is a chance of the stock going to zero they want to be able to hang in there and not get wiped out by a buyout offer that comes in out of the blue. At this point big short players, like hedge funds, buy calls for insurance. Since most large long holders have already sold out, the only guy selling calls is the option MM or (some other big swinging Richard who sells naked calls). Options MMs don't sell naked (not and last very long), they take action to be delta neutral and they buy long to cover their exposure. All this has the effect of keeping what might go to zero elevated at a higher level.