|
PureBytes Links
Trading Reference Links
|
It would be entirely illegal to accumulate atock or options in
anticipation of a broker recommendation. Despite the myths, the big
firms don't do it because the risk to their reputation is too great.
I have no doubt that if the recommendation had come out during expiry
week, there would have been accusations of manipulating expiration...
DanG
Stan Rubenstein wrote:
> >
> > The problem I would like to address to RT group concerns the timing of
> the
> > DMG recommendation relative to Option
> > Expiration. As follows:
> > I know from my own corporate experience that such Broker recommendations
> > are not made overnight and usually
> > require time for reviews by management levels in the Brokerage. This
> could
> > be a matter of days or a even a week.
> > Since Option expiration was close at hand when DMG must have made the MRK
> > decision they had to also decide
> > on which side of the Expiration day to make it public..
> >
> > Would they have taken into consideration that many Call buyers would
> > benefit from a pre-Expiration announcement
> > and DMG didn't want to unduly enrich such outsiders?
> >
> > Since some of DMG's preferred clients with early knowledge of the pending
> > public recommendation would have placed
> > MRK calls to take advantage of it an announcement before expriration
> could
> > have appeared self-serving to DMG.
> >
> > Or are there any SEC rules governing the timing of Broker recommendations
> > on or about Options Expiration date?
> >
> > The Open Interest on Jan 105 and Jan 110 calls was approximately 13,500
> > contracts so this decision by DMG
> > was not trivial.
> >
> > Hope to hear from RTers who share the question; what are the factors
> > governing a Broker Recommendation
> > Announcement prior to or after a near-in Options Expiration?
> >
|