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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Robert Einstein who wrote (13680)	12/19/1997 5:17:00 PM
From: derek cao	Respond to of 70976

Re: Who say stock not manipulated ???!!!! Robert, it may well caused by self-adjusting when you have large volume of options expire at the same time. Intel closed at exact 70. derek

To: Robert Einstein who wrote (13680)	12/19/1997 9:38:00 PM
From: W. Luther	Respond to of 70976

<<Who say stock not manipulated ???!!!!>> I think calling it arbitrage is more appropriate than calling it manipulation...it's something to be expected when the options expire...Cramer had a good piece on TSC this week about it...basically it goes like this: if your're long a call nearing expiry and that has a strike close to the underlying price, you might sell it to get something out of it...when the market maker buys it back from you, he can short the stock and hope the price drops to make a risk free profit...similarly, somebody else might sell his put back to the mm, in which case the mm can go long the underlying and hope the price goes up so as to get a freebie...the result of all this is that the stock price tends to gravitate to the strike price...again, I wouldn't call it manipulation -- it's just the way things work...the key is to understand it and not let yourself get in a situation where you come up on the short end of the stick! Cheers, Wade