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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 171.02-1.5%Dec 31 3:59 PM EST
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To: waverider who wrote (85338)11/1/2000 12:14:32 AM
From: Wyätt Gwyön  Read Replies (1) of 152472
 
In the case of JDSU, the premiums (i.e. prices) went up prior to earnings, so much so that even though the stock rose considerably after earnings, many of the options actually fell in price. So the implied volatility was excessive prior to earnings, then collapsed afterward. I have no idea if that'll happen with QCOM, but it's something to keep an eye out for. Just for example, taking the 82/55 theory--if enough people believed that and bought a 65-strike put and call, the demand for those options would go way up, and their prices could go up even if the stock hardly moved prior to earnings. But then, after the earnings event, the put and call prices might revert to more normal levels (relative to wherever the underlying stock price ends up). The net effect of this scenario is that it would be more difficult for 82/55-theorists to turn a buck on the straddle. All of the above is just my uneducated opinion and guesses.
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