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To: HRAKA who wrote (886)	3/27/1998 12:20:00 PM
From: joe	Respond to of 7703

no they dont have to cover today. the way short selling works with these market makers is this #1. they are trading a position for their firm and are short securities if the stock goes up they have a loss in their trading account which the market maker gets a substantail percentage of as his income. obviouslty if you are a m.m you dont want to take a loss and with news like this you would tend to cover by the end of the day if you cant bring in your short and a profitable level. (thus reducing the chance of a run up the next day on more news .. and risk a big loss and the chance of loosing your job or getting in trouble with your boss.) #2 if you are a m.m and carrying a large short for an extended period of time the avalibilty for your firm to borrow stock becomes difficult. if someone wants delivery (cash account and taking physical delivery of certificates) they can "buy you In" (worst case scenario) and this would run the stock fast and furious. (i dont think this will happen here) however they may get close to a buy in and the stock loan dept. will inform the trader to not short any more or start to cover the position (In both cases the stock will tend to go higher)