To: Peter who wrote (2591 ) 12/24/1997 8:40:00 AM From: Timoteo Read Replies (1) | Respond to
Peter: I don't put much stock (no pun intendd) in broker's advice. I have shorted stocks that have had all strong buy recommendations from the major brokerage houses only to see them crash after bad news or disappointing earnings. Look @ RMDY yesterday and check the Zaks ratings and you'll see what I mean. Investors are wary because of all the delays. On the other hand, no stock should ever ruin your life and nothing is a sure thing. I lost a ton of money last year at this time in a ZITL short squeeze so I understand your angst. I was right about the stock (then 70, now 10) but didn't want to chance losing everything. On the other hand, your loss will be limited to the downside which I believe will be 11 or 12 if the deal falls through. If you buy put options if gives you the right to sell the stock at a certain price. If the stock goes up, they will lose value-down and they gain. You can sell the options or convert them. Right now January 17.5 puts are bid 2 7/8, ask 3 1/4 symbol CXQMW. February are 3 1/8, 3 1/2 symbol CXQNW. In other words it would cost you about $9000 for 30 contracts of CXQMW. Essentially, this would lock in today's price for you. If a merger announcement was made, the value of the options would be 1/4 or a 1/2 until people were positive then eventually nothing. Or you could hedge half your position.
