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To: Rational who wrote (7656)	2/26/1998 10:33:00 PM
From: Michael Collings	Respond to of 27307

Sankar, given the fact that the large bulk of the options traded at the offer of 28 3/4 which was the offering price at the high today, I think its safe to assume that the seller was the specialist and the buyer was the holder of the short calls, thus making a drop in the open interest the more likely scenario. The high price of the stock today was 68 1/2.

To: Rational who wrote (7656)	2/27/1998 1:28:00 AM
From: TheBigB	Respond to of 27307

It's simply possible that someone sold covered calls on the 500,000 shares that they held (could it be fidelity) and then when the price dropped low enough, they stepped in to buy back since they believe in holding atleast some of the stock. Thsi caused the specialist to buy back the shorted stock. Now Fidelity (or whoever) sold those options will soon stop buying when the stock hits 70 or so since they would be losing money by buying any more options back. Unless of course they intend to cause a squeeze and liquidate their holdings above 70 or 75 ... Given their position, they may have no alternative but to sell stock if they want to buy back their options at an ever higher price at a loss. Of course, the real strategy may have been to buy back the calls to cause a squeeze that causes other shorts to capitulate and then they sell their stock into the panic buying that occurs after that - like on thursday and friday. All these scenarios call for higher float and decreased short interest though and those few shorts who have the resources to hang on may be spared. This means that if YHOO ever does fall, there won't be any short covering to break the fall and that could be dangerous for Longs. The fact that this rise can be attributed to options activity may actually indicate that this is the end of the extended short squeeze that began on Dec 19th. In fact if you remember that was the exact situation - only reversed, a sudden swoon of $6 followed by a sudden rise.