Has Solly Got Synthetic Shorts?

Hi all,

Reported in the SMH "Bond Street" 21 Oct, suspected activities of Mr Lew and companies early last week.

Purchase 18 million CML shares @ $6.35

Purchase 18,000 CMLVQ $9.00 PUT OPTION EXPIRING 19-Dec-2002 at $2.69

Sell 18,000 CMLTQ $9.00 CALL OPTION EXPIRING 19-Dec-2002 at $0.01

Long stock at $6.35 and a synthetic short position at $6.30. What is the anonym of arbitrage? Someone seems to have paid $0.05 (not including funding costs) per share to temporarily boost shareholding. The loss has been locked in.

Obviously no intention of retaining stock because, if CML finishes above $9.00 the calls will be exercised and our call writer will be obliged to sell. More likely CML will finish below $9.00 and our put taker (supposedly the same entity as the call writer) will exercise the options and sell the shares. Whatever CML's price the shares will be sold.

GK