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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Zebra 365 who wrote (13125)	11/27/1997 10:36:00 AM
From: Zebra 365	Read Replies (1) \| Respond to of 18263

YOU DON'T KNOW JACK To those who think they have done their Due Diligence after checking insider sales, I would like to present you with a little-known strategy that is becoming more popular with insiders, the option collar. Let's assume that you are an insider who has 100,000 shares of a stock trading at 22 and you want to hedge against a decline until March without selling and showing up on the list of 144 filings. You just set up a "collar". This is simple, buy 1000 March 20 puts, and sell 1000 March 25 calls. The premium from the calls offsets the expense of the puts, and for very little out of pocket now you are insulated from a drop below 20 in exchange for giving up the potential gain above 25. You do have to file with the SEC when you do this, but most investors only track insider sales and purchases of Stock, not Options. Or, to be even more subtle, you can arrange a private equity swap with another party, when you agree to exchange the equity you have for say, an equal amount of GE, or a Index basket of stock, and then the other party sets up the collar to protect themself, without you even filing with the SEC about the collar. The SEC is still scratching their head over this one. Now, Zebra does not know where you find out about derivative transactions from the SEC, but I'm throwing this out here so that someone may bring us back that answer. You may think you are a sophisticated investor, but if you don't know about the derivative picture on insiders, then You Don't Know Jack. Happy Thanksgiving to All Zebra PS Any resemblance of this strategy to that played by any real person, living, dead, or incarcerated, is purely coincidental.