Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Alighieri who wrote (113775)	6/1/2000 8:53:00 PM
From: chic_hearne	Read Replies (2) of 1572712

Re: Can someone familiar with options explain the closing paragraph? Al, I posted this yesterday. Message 13806952 Last paragraph: A hold at the 80 level and increased pessimistic options activity could bode well for AMD. But before taking a stance on the stock, we must see more pessimism on the shares as they secure the current levels. Let me take a stab at this, someone correct me if I'm wrong. Schaeffer's put/call open interest ratio (SOIR) on AMD has been relatively stagnant around the 0.40 to 0.49 area for the past two weeks. This means for roughly every 4 open put contracts, there's 10 open call contracts. This is considered bullish. The last paragraph is implying that if AMD can hold at $80 a base is forming. If open June 80 put contracts go up, this is a pessimistic stance on the stock. But if you combine the 2 together, it's even more bullish. I.E., you have the bears buying put contracts at June 80 expecting the stock to go down, but the bulls are so STRONG the stock won't break below 80. When the bears come around and turn into bulls (combined with the bulls that wouldn't let AMD drop below 80), the stock is ready to break out to the upside. chic

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