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.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: William T. Katz who wrote (759)	11/12/1997 4:43:00 PM
From: Don Westermeyer	Read Replies (1) \| Respond to of 164685

William, I can tell you that options usually cause a stock to go up in the beginning. I don't know that for fact but I am sure that I read that somewhere. OTOH - AMZN is so overvalued and shares so hard to short, etc. mabey options will actually cause the stock to fall faster, I don't know. It's probably why there was a pop in the stock today (though short lived). To be honest I may watch for another momentum play and box my short position if it looks dangerous again. I sure would like to see about 2 million shares added to the float! Don

To: William T. Katz who wrote (759)	11/12/1997 4:53:00 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 164685

Bill, they would buy a put and sell a call at strike prices a little below (for the put) and a little above (for the call) the current stock price. They are still at risk for movements between the two strike prices, thus allowing them to meet IRS guidelines and defer the gain on the stock until they actually sell it. The "zero cost" aspect of it comes in if the call premium offsets the put premium for a net cost of zero. The broker or some third party arbitrage player can take the other side of the option positions and short the stock, pocketing a small profit for his/her trouble. Or the other side can be a bunch of speculators buying calls and selling puts, but who would do either on this stock? The effect on the stock price is uncertain. If the other side is hedged, the shares do end up in the float. However, it appears that insiders are not selling which could help support the stock. Hope that helps. Bob