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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (4683)	4/20/1998 1:26:00 PM
From: Flagrante Delictu	Respond to of 9719

Peter, the question of transaction costs is obviated, if you buy the warrants for $6.125 less than the stock can be sold at & then sell the stock at that price that it can be sold at after having bought the wt. at $6.125 under the stock.. The solution to the wt. illiquidity is the short sale of the stock, which is highly liquid, against the warrant holding. This can be done repeatedly between now & 6/3/00, as long as one covers the prior short before he reshorts. You put up less money, you lose less on a decline & lose no more on an unchanged or higher price, than the stock (assuming you use the $6.125 saved to reduce your margin balance). What could be better? You must know the professors can't be right in the real world. (Smile) Otherwise, where would we find enough professors?