U.S. OPTIONS FOCUS/Telebras active as stock climbs
Reuters, Monday, March 02, 1998 at 20:55
CHICAGO, March 2 (Reuters) - A flurry of activity in
Telecomunicacoes Brasileiras SA (Telebras) (NYSE:TBR) (SAO:TEL)
options injected life to an otherwise dull market on Monday.
Several large bullish spreads in the options market
contributed to the stock's 4-point advance on the New York
Stock Exchange to 126-7/16, the highest price since last
October, a trader said.
The activity came as a panel of Brazil's National
Telecommunications Agency was set to review on Monday a draft
plan for post-privatization competition in the country's
telecom sector.
"There may be some speculation about it, I don't know, but
there seemed to be a lot of two-way business," a trader said.
He noted the sale of April 115 calls against the purchase
of April 125 and April 130 calls and another spread whereby
March 125 calls were bought against April 115 puts.
"That helped put upward pressure on the stock," he said.
Implied volatility for March at-the-money options rose to
around 38 percent, up from around 35 percent on Friday. It has
crept up from an average of about 30 percent in February.
"People seem to be looking for some good news," another
said.
"Or it could just be momentum players getting into the
market," he said. "The volume in calls is very bullish."
Trading was quiet elsewhere, with most of the focus on
options on top technology companies.
"It's Telebras, Digital (NYSE:DEC), Compaq (NYSE:CPQ) and Dell
(NASDAQ:DELL) -- that's the market," an options analyst said.
S&P 100 options activity also was lackluster on the Chicago
Board Options Exchange even as the index rallied to a fresh
record peak early and then pulled back.
The Market Volatility Index (INDEX:$VIX.X), which measures implied
volatility on the OEX, rose 0.12 point to 19.55.
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Copyright 1998, Reuters News Service |
