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To: Saul Feinberg Jr. who wrote (9704)7/29/1998 3:59:00 PM
From: Saul Feinberg Jr.  Read Replies (1) | Respond to of 42804
 
Seth,

Convertibles are hard to figure. You have to
use Black-Sholes to compute the option component of
it, etcetera.

Put simply, every one who shorted against the bond
and sells the bond before conversion/maturity has
to cover his position. So, even some of these "shorters" who
short against the bond have to cover.




To: Saul Feinberg Jr. who wrote (9704)7/30/1998 10:31:00 AM
From: Seth Leyton  Read Replies (2) | Respond to of 42804
 
Saul, it would be interesting to know the formula. Heck...it might even make us a buck some day. You're right, someday they'll cover. But you'd figure it would be after the stock goes above the spread between the short price and the conversion price, less interest, etc, etc.


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