Option Investor

On the "Watch" List - GLBC

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Shares of Global Crossing (NASDAQ:GLBC) continued their recent slump today, down nearly $0.90 to $19, despite any "public" news to explain the bearish activity. Of course, a large part of the near-term gains in the issue have been related to speculation, rather than investing, and the battle between the "shorts" and momentum traders appears to be causing another spike in volatility.

Regardless of the relative safety of the sold (put) strike at $15, this position is officially on the "watch" list and readers with a conservative outlook should consider exiting the play to prevent any future losses. The current price of the FEB-$15 Put is $0.15 X $0.35, so a closing order of $0.30 would likely be filled without delay. A more aggressive trader might use a "sell to cover" order on the stock (a short position in GLBC) with an initial "buy" target near the sold strike. However, be aware that the issue is heavily shorted and finding shares to sell may be difficult.

Some interesting comments on the activity in GLBC can be found here:


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