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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: KAD who wrote (15397)	1/28/1998 11:34:00 AM
From: hpeace	Respond to of 97611

i wouldn't touch options on cpq and dec now

To: KAD who wrote (15397)	1/28/1998 11:37:00 AM
From: Pierre Aydin	Read Replies (1) \| Respond to of 97611

KAD, Last time I checked DEC was at 56-9/16 but according to the deal it should trade at approx. 58-3/8=$30+(30-1/8.945) so you see there is a difference that is close to $2, this is what the Arbs. are playing with by shorting CPQ and buying DEC. I think this is what u should do: Example: Short CPQ 1000 shares==========> -$30,000.00 Buy DEC 1000 shares==========> +$56,000.00 At the closing of the deal you will get $30,000 cash(you cover your short with this) + .94530*1000= $28,350.00=> your total recived will be $58,350.00, your profit will be $58,350-56,000=2,350.00. I think this how it works. pierre