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

To: AlienTech who wrote (3033)	6/6/1999 10:30:00 AM
From: Tom Bunge	Read Replies (2) \| Respond to of 4467

Food for thought "Why would someone sell 16000 JUN 115 puts on this stock? Considerig each of them costs 47 bucks and thats 16000 * 100 * 47 bucks". One possible scenario - answer to your question: 1) If there is a "sale", there is a "buy" 1) Let's assume you want to put your hands on 160,000 ICG shares - IPO price plus cost of financing which, by the way, we all also have 2) You buy 1.6 million shares which you will unload on the market before June 18 (option expiry) 3) You hedge against price fluctuations by also purchasing free (basically) time-premium out of the money puts (16,000) You get your ICG shares in due time and have liquidated your long positions without loss, though a costly capital investment, approx. $450,000 interest cost over the period, which is $2.85 per ICG shares acquired in the transaction. Could this "put" trade be linked with the huge SFE block trades seen in late hours on Friday? Naturally, it may be stretching a bit far … so this answer is meant for discussion, mostly! Cheers - TB