Mike, I am thinking of buying puts at 10 and calls at 12.5 on Novell as a volatility play. What's your opinion of Novell first, and second what do you think of straddles? I know Novell is just another in the long list of competitors who have gotten creamed by Gates and Co. (i.e. the Wordperfect fiasco, etc) but the stock has been stuck at around 11 for a while now and I figure it should move somewhere, either up or down. I believe they are reporting earnings in a couple of weeks.
A separate and much more controversial question is about HP. Some of us, including me, are convinced that sometimes the big boys sell a lot of high priced options on some stock and then scheme to make sure the options never break into the money. I remember thinking this was happening to AMAT at one point early in the year. Anyway, it looks to me like it's happening right now with HP Aug 45 calls. Presumably the big boys do this by selling their HP stock whenever the price gets around 45, thus putting a lid on the rise. Ok, enough background: here are the questions.
1)Do you think this is happening right now with HP?
2)Did you ever do this as a former "big boy" or see this done? (I realize this is like asking Gaylord Perry if he threw a spitter, but I thought I'd ask anyway).
3)Is this legal?
4)Assuming this is being done, is there some good strategy one can use to take advantage of this situation?
I also have some comments on your interesting reply to my previous posting which I will post later. Thanks. |
