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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Russian Bear who wrote (11579)	11/22/1997 8:08:00 PM
From: Flagrante Delictu	Read Replies (4) \| Respond to of 32384

Russian Bear Re: heavy margin. It seems that my whole life whenever I was margined up to the gills, some exogenous event caused a downdraft in my equity of sufficient consequence that I felt forced to liquidate some or all of what proved to be, by hindsight. fabulous positions. I don't let myself get into that kind of trouble any longer. The pain attendant with a waterfall is so powerful as to unleash emotions & unhinge logical response. Hopefully, in the current situation that won't happen. But, based on hard & long experience in trading, I can generally advise only limited if any margin. It's easier to sleep & react intelligently that way. If you have the stock instead of the warrants & are considering reducing your margin balance, a possible solution is a switch on a one for one basis into the warrants, thereby reducing the margin balance by around $500 per 100 shares at the current price. Ideally, you would prefer to make the switch at a $550 to &600 difference in your favor. This tactic might reduce the amount you owe the man by enough to prevent a deleterious decision should there be a temporary crisis in the general market wholly unrelated to your position. In the interest of full disclosure, I am basically positioned in this way, with a much larger option position than stock position. I would not however, advise switching each 100 shares of stock into 150 warrants on margin because that would subject you to the irrational fears that tend to sink the heavily margined during the inevitable occasional crises. Obviously, if we have seen the bottom, one would have been better off not to make the switch. But insurance has a value. That value is easiest calculated in hindsight. Since I believe we are in the midst of a mutiyear base, & since I believe the weekly chart is positioned in such a manner that market historians will point to & wonder why everyone didn't spot the forming head & shoulder reversal pattern that will be completed when the stock reverses & since the substantial recent drop in the volume is the type of condition observed before the initiation of many of the inflection points in past base eruptions, I am naturally conflicted in advising a more conservative policy just before what I think can be a very pleasant upside surprise. On the other hand, experience proves that Murphy Rules. Good luck to all. Bernie.