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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Nazbuster who wrote (27034)	12/8/1997 4:46:00 PM
From: WBendus	Respond to of 61433

"Style, has anyone ever tried to correlate PUT OI to short interest? Perhaps if there is a correlation, you could use the OI as a proxy..." Virtually impossible to do Daniel. For starters, there are various contracts and the people that play them are typically speculators and hedgers, far different from people who short the stock. Using options to establish a short position in a stock is just like trying to use them to establish a long position in the stock, it typically does not work because of the errosion of time premium. The second issue is that there is likely a lot of "noise" in the data. I would be that you would be hard pressed to even get a correlation coefficien of .25 or better and then the p-value would likely be around .30 and prove to be insignificant. The third issue, is what date do you use to record Put open interest, changing this date will like significantly alter the results of the correlation, if there is any. Wayde.