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

To: Brian Coakley who wrote (9338)	11/17/1998 2:01:00 PM
From: SteveG	Read Replies (1) \| Respond to of 12468

<..Looks like someone wrote 500 calls and bought the puts for a debit of 5/8's ($31,250)..> And are currently underwater over $50,000 (down 3/4 on put purchase and 1/4 on call sell) <..The trade is essentially a short of 50,000 shares..> The call selling alone is a 50K short. As can be seen by the current valuation, the bear spread is more aggressive than a simple 50K short. In addition to selling (assuming) the risk of a move above 35, on this # of shares, they also bought the risk of not moving below 30. <..and means someone has a serious negative bias about WCII as the trade mirrors the movement of the stock price, and the person will make money if the stock moves lower or closes below 29 3/8 in April..> Like a short, they have unlimited risk as the stock rises, additionally spending a few bucks anticipating the stock down. Wonder what they might know (or think they know)... They lose $100K for each point above 29 3/8 to ~35 and then $50K/point up after that. $45 by then would garner a loss of ~$1MM.

To: Brian Coakley who wrote (9338)	11/17/1998 2:11:00 PM
From: Steven Bowen	Read Replies (1) \| Respond to of 12468

"Check out the April 30 call and put activity. Looks like someone wrote 500 calls and bought the puts for a debit of 5/8's ($31,250)." Hi Brian, Yeah, that was me. No just kidding. I did decide to go short though, bought puts actually. I can't believe Greenspan will cut, can't believe market can go back up thru 9000 this easily, and think WinStar has to go back and fill the gap in the chart in the low 20's. Yep, looks like someone bet big. It looks like 1000 puts were bought at the same price at the same time. Actually, short 500 naked calls and long 1000 puts is almost like short 150,000 shares isn't it? Since you don't know the stock position, it's hard to guess what they were doing. They could be long 50,000 shares, sold covered calls, and bought the puts for protection, but that doesn't seem to make much sense. They do look to get hurt big time if the stock moves up though. (This was type of position Jason told us he put on last summer, short calls and long puts. Very risky). PS Whoops, sorry, CEO beat me to it.