Wave Systems Corp. (fka WAVXQ)

[dig space]

lugan on oustanding short position,

as the reported short interest is a snapshot we know very little about when the postions were actually established.

1. Considering that there are some 10 million shares of warrants far into the money (an ave strike of 75 cents cents rings a bell) a lot of short interest could be against the box, simply having locked in a gain, with no real requirement to cover at any time (less the warrant expiration date).

2. Obviously the options market can effectively hedge a short position, although this would have to play itself out over the duration of the contract.

It may be that the MMs went massively short on rebalancing, it may be that others went short, it may be that warrant holders anticipated the volume and went short against the box (in which case they are effectively covered) ... who knows. Its hard to forecast much of anything based on short numbers with Wave, in the past it was largely governed by PPs, presently it may well be goverened by warrants.