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Technology Stocks : Ezenia! (VSVR)
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To: Carmine Cammarosano who wrote (376)6/17/1997 9:04:00 PM
From: Anthony L. Califano   of 890
 
John and Carmine, if you don't mind an unbiased opinion, I agree with Carmine that an increase in open interest (unless you know whether it represents buys or sells) would not appear to tell you much unless you factor the premium price and price and volume volatility into some model (I have never formally done it).

I disagree that selling calls is always bearish since a lot of people do it on stocks they hold. You can still sell a covered call and make a very high annualized return if the stock appreciates beyond the strike price if you factor in the call premium and the stock price appreciation (assuming the strike price was above the price of the stock when the call was sold). Some people sell calls for bearish reasons and some for bullish reasons, some do it if they think the price won't move much - it all depends on the variables.
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