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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: steve susko who wrote (34559)	4/29/1999 10:00:00 PM
From: Ed K	Read Replies (1) \| Respond to of 90042

I've had it explained to me this way: (the legal way) Say the M&A is being handled by Goldman Sacks. GSCO is also a MM. So they are sure to build a fire wall between the M&A division and the associated MM in the stock so that there are NO leaks (not only is this disclosure unethical, it is also illegal, and it will cost the M&A business in the future, because the stock price rises and the merger cost goes up). BUT ... as soon as the deal is made and the INSTANT it is legal to make an announcement, the fire wall comes down and GSCO raises it's ask. Now everyone knows. The other way: (not so legal, ala in TSC Cramer's column about 1 month ago) Certain privileged accounts (namely big funds) are "leaked" and there is intense activity in the options. After the MM writes the naked calls, he discretely asks if he needs to buy the stock to cover his position. Now they are in the know as well. Ed K