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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (9929)	7/10/1998 12:54:00 PM
From: umbro	Read Replies (1) \| Respond to of 164684

Is AMZN that liquid? I thought that was why we went up so far so fast- because it was illiquid. In my opinion, an urban myth created by the press because they used incorrect data regarding the float, and then capitalized on by the momentum traders, who scared the pants off the bears. Sorry to be so repetitive, but the float on AMZN is between 15 and 17 million, which is twice the last reported short interest (8 mil.), in June, and is more than the float in any of the high flying i-net stocks. The float might be 5 mil. higher, due to the secondary that the company floated in early June, so that'd make 25% more shares in the float and take it on up to 25 mil. or so. More than that if/when the insiders unload (they control 30 mil/so).

To: epicure who wrote (9929)	7/10/1998 5:00:00 PM
From: J.S.	Read Replies (1) \| Respond to of 164684

X - person (VBG), I believe that option expiration consideration is a fine tuning consideration that will not apply to AMZN next week. There is too much interest from too many quarters. Consider the size of the spread. When heavily traded, it is routinely 1/8 to 1/4 which is very low for AMZN, particularly in light of its recent explosive volatility. It would be rather hard for option players to exert enough control. I think the reason that stocks often go to a nearby option strike price is due to the fact that as expiration nears the option is worth more as a "hedge" for short term trading than it is as a speculative instrument to take advantage of big movements in the stock price. For example, with three days left there are essentially three opportunities for news or broader market developments, however there are countless opportunities for short term (as fast as a few seconds) trades. Say ABC stock is at 50 and you have a put. You see very little reason for the stock to make a big move. So whenever the stock goes to 50 or below and you get a short term buy signal you buy 100 shares with no risk. As the stock bounce around you sell when you get a short term sell signal above 50. If I have a call at 50 I do the converse, shorting without risk. What this does is keep the stock very close to 50. We repeat as needed and can eventually milk the option for more than its worth as a leveraged proxy for the underlying. If next week is quiet on the bigger picture issues than we may see this effect. Good Luck, Joe