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Biotech / Medical : Gilead Science (GILD) Followers

GILD 122.76

-0.3%

Dec 31 3:59 PM EST

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To: guido leone who wrote (295)	5/27/1997 10:34:00 PM
From: Miles Rhyne Hoffman, CFA	of 961

My point: You can not know what the option trade means unless you know the one doing the trading. Some brokers seem to use high option volume as a sales point... "SOMETHING IS HAPPENING!!! YOU 'GOT' TO GET IN. 'SO and SO' options traded... blah, blah, blah (or yada, yada, yada)." When I was managing a big portfolio I would sell calls against stock positions ("writing covered calls"). At some point, sometimes, I would have to buy them back. Unless you knew what I was doing, seeing a large volume of option trades meant ABSOLUTELY NOTHING about the direction the stock was going to move (or whether it was going to move at all). I should qualify my remarks by saying, it is often easy to see ILLEGAL option trading in stocks with big announcements... in hindsight.

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