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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: michael r potter who wrote (2850)	5/17/1999 2:02:00 PM
From: FtrPlt	Read Replies (2) \| Respond to of 4467

Sir, Why don't you just sell the aug 115 put? This has the same risk profile as a covered call and less commisions. This of course assumes that you have the $ to cover the margin in a retail account. :) Ftr

To: michael r potter who wrote (2850)	5/17/1999 7:46:00 PM
From: Sir Francis Drake	Read Replies (1) \| Respond to of 4467

Mike - on the contrary, I find your views on SFE options very interesting. The reason I didn't respond, is because I'm not a very sophisticated options player. I daytrade, position trade and LT invest, but I'm extremely careful with options (perhaps my fears are exaggerated). For some reason I find a greater sense of control and security trading the stock rather than options. However, I'd like to get more active with options, and your views are of great interest to me. Re: manipulation. First, I define it as price activity that is due solely to the trading of one or several entities (such as funds, brokerage houses etc). In other words, I have no objection to shorting/going long because you anticipate differing market conditions or on fundamentals, news or any reason whatsoever. If however the only reason a price moves is self-dealing trading activity, I call that manipulation, even if it's legal. A good example of manipulation is trading by a brokerage house that brings a stock to the market. They are in a very privileged position, they know not only the exact status of the outstanding, float and ownership of most of the shares of the stock, but they know all there is to know about the financing. They often house the treasury stock, the original owners stock, and even many of teh investor's stock. So, they are in a great position to f.ex. short a stock to the hilt, knowing they have plenty of shares to use should they need to. They also have access to immediate knowledge of trading of the stock. Shorting under these conditions is often a beaut - buying takes cash, so it is more vulnerable to drying up, while selling can often be done 'naked' (also by MMs who don't need to search for shares the way a retail invetor has to, and so a brokerage house that is an MM and an issuer of the security can have some 40% more shares out there than was actually issued). Few stocks (with the exceptions of nets<ggg>) which are small/micro cap, without insitutional presence, can withstand such selling pressure under these conditions. Can one say by any stretch of imagination that the brokerage house under these conditions plays on the same level field that the "little guy" does? A good example of such activity can be seen in TDFX. The offending party in this case is Montgommery who was their IPO underwriter, and has dogged them ever since. Thankfully with TDFX recent acquisition of STBI, this will be comming to an end.