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Strategies & Market Trends : Options

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To: RoseCampion who wrote (410)1/1/2000 8:23:00 AM
From: Eric Martin  Read Replies (1) of 8096
 
Friday after the split, the implied volatility on January '00 QCOM calls dropped from 135% down to 95%. This is probably a reflection of the end of the short covering and window dressing of the stock prior to the split. It seems the level is now more "rational" but it takes a lot of wind out of the covered call write strategy.

Also on a percentage basis, the increase in bid ask spread on the options after the split makes trading them more difficult.

Eric
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