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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Raj Ramaswamy who wrote (16086)	5/6/1998 8:33:00 PM
From: Karl Drobnic	Read Replies (1) \| Respond to of 31646

Raj: The hedge position in the example I gave could be taken off by using 200,000 share long position to replace the 100,000 short shares. The institution would have no loss on the short shares, and have the gain on the remaining 100,000 long shares. Or they could simply repurchase the short position at a loss, having a gain on the 200,000 share long position. While hedged, they gain $.50 for each $1 that TAVA moves up but they lose only $.50 for each $1 TAVA moves down. They can, of course, make it much more complex than this.