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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Redhead who wrote (3838)	4/26/1998 9:30:00 AM
From: Amigo Mike	Read Replies (1) \| Respond to of 29382

Hi Redhead, A large short interest usually means that the stock is expected to go down. However, there are several arbitrage strategies that involves shorting and sometimes the large short interest results from this. DHI is the 7th largest short on the NYSE. However, I don't believe DHI is expected to go lower .... rather it is an arbitrage play resulting from the merger with CON. IMO .. the arbs want to keep DHI "in place" between 20 and 22 .... and capitalize on call options. CON also had 2+ million shorts. The open interest in the May 20 calls is over 4000 .... it was over 5000 at one point. This will all come to a head by May expiration of options. Amigo Mike