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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Seth Leyton who wrote (7012)	2/10/1998 2:03:00 PM
From: SJS	Read Replies (1) \| Respond to of 42804

Yes, hedge is protection. No problem there. I don't conclude anything except maybe one of the following conceptual ideas: 1) Short 1000, stock drops some, and then buy 10 calls to lock the gain. "Legging" the hedge. Hard to do, but profitable if the stock moves big to the downside before, or even after the hedge is in place. 2) Short 1000, immediately buy 5 calls as a partial hedge. Again, if the stock moves big to the upside, you've got some protection. If the stock move big to the downside, you could easily cover the partial hedge cost of the 5 calls. True, I don't know anything about the 200 call buy,and the underlying (if any) position it was purchased on, or against.