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Strategies & Market Trends : Shorting stocks: High fliers -- Ignore unavailable to you. Want to Upgrade?

To: Q. who wrote (599)	12/1/1998 10:53:00 AM
From: RockyBalboa	Respond to of 709

That crazy... I sold short warrants at 16 and 18. Suddenly the stock faltered from 24 and I could buy back warrants at 16. Ups. (Yesterday I offered warrants at 11, but noone wanted them). Now the stock is 22 again within seconds the warrants at 17 and I'll sell some. But maybe buy stocks before. As long the prices are that high, there is actually no premium. Do you remember the last week when I found that barrons article (or WSJ) and posted it here, grumbling that it may be nasty for us. On the same day earlier, unwitting of the article, I sold warrants at 5 3/8 only to be stopped out at 6. But 17-22 I've never expected that (If I did, I was long bfly). A nasty short squeeze. Driven by the options? When people hastily box the with warrant. I see often that the option anticipates a price movement in this stock now. Now it goes towards 23 again,as it didn't cross the 24+ (the first top) I think it's time to sell (If the old mechanics work, which have been not working in AVCO or GMAI). Time to sell for me.. Although most of my screen is red, it is not that easy. C.

To: Q. who wrote (599)	12/1/1998 12:33:00 PM
From: chester lee	Read Replies (1) \| Respond to of 709

John, <<I sold my warrants at 17, when the stock was 22, so I'm now short the equity without any hedging. I just hope I don't get my shares called in. With this small float and this much flipping going on, there's no way to know if the shares I borrowed will be available tomorrow.>> I would think that with high turnover (lots of churning), that the shares for borrowing would actually be more available than if the stock didn't trade. As investors (they're actually speculators) jump in to buy, the brokerages then have inventory. Even though the inventory is rapidly churned, the brokerages still have three trading days to make good on their delivery. In essence, 50K of volume in brokerage-A for a few minutes is good for 50K shares to be loaned out (at least for three days). As the churning continues, the 3 days would be extended indefinitely so long as there are buy orders processed by brokerage-A. Beware of the music ending. When the buy orders stop, the borrows are due 3 days thereafter. This is all a theory, and I don't know if brokerage-A would allow shorting on a stock with the volatility and trading frenzy like BFLY. Schwab did something interesting this morning. They dis-allowed electronic trading for uBID and ticketmaster, citing the volatility. If you want to trade, you must talk to a broker. JMO. I have no position on this or any other internet stock, long or short. chester