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Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: Jason Cogan who wrote (5621)	4/30/1998 10:41:00 PM
From: Steven Bowen	Read Replies (2) \| Respond to of 12468

Jason, "I have wagered, as of today. Sold some July 50 calls and bought some July 40 puts. Seemed like a good way to get short the company, as well as an overall hedge on the market, with little to no money upfront. Let the games begin." Tell me what I don't understand here. Let's see, if the stock opens tomorrow at 70 on takeover news; You'll be buying back the July 50 calls, that you shorted and probably got a buck and a half for, for probably 21 (if there's no talk of a higher bid, in which case you'll probably pay 25). The puts you went long on that you probably paid $5 for will be worthless. In short, for little or no money upfront, you just lost $25 per share and will have your broker on the phone by 10:00 demanding cash from you. Even if the takeover doesn't happen, if the stock gets back on track and hits 60 by July, you'll still lose $15 per share with little or no money upfront. If it hits 80, you lose $35 per share, etc. This looks like a total gamble on you being right. How can you possibly see this crazy position as taking advantage of market inefficiency? Unless you went long the stock, which would be a totally different position than what you've admitted to (actually you're claiming a short position, so you couldn't be long the stock, so this still makes no sense). Please enlighten me. Also, you've harped on this negative net worth of $2B about ten times now. Would you please enlighten me on this also.