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CHICAGO, July 7 (Reuter) - A trio of technology stock
options highlighted activity on Monday, traders said.
Options on shares of Compaq Computer Corp (NYSE:CPQ) were busy
as the stock continued to rally after the company announced a
stock split, and implied volatilities in CompuServe Corp
(NASDAQ:CSRV) and Motorola Inc (NYSE:MOT) were moving higher.
In late trading, Compaq shares were up 4-7/16 at 113-05/16
despite a broad market selloff. Last Tuesday, the computer
maker announced a five-for-two stock split payable to
shareholders of record July 14.
Mike Ditzler, pit representative in the Compaq options
trading crowd at the Pacific Exchange, said investors were
mainly buying calls.
"People are just buying up the calls," he said. "Mostly
because of the stock split, but the whole market's been up the
last couple of days so we've been up with it."
The bellwether Dow industrial average (INDEX:$INDU) had climbed
223 points in the last three sessions. It extended gains early
Monday before backing off in the afternoon.
Ditzler said outside of the call buying, activity in the
Compaq options was fairly mixed.
"There's some trading going on but nothing big one way or
the other," he said.
Among the Compaq options, the July 115 calls traded 4,845
contracts, the July 110 calls traded 3,715 and the July 105
calls traded nearly 3,700.
The most active puts were the July 100 and 105s, which
traded 1,125 and 1,555 contracts, respectively.
CompuServe shares were up 1-5/16 at 12-1/16 in late trading
on buyout speculation, traders said.
The Wall Street Journal said Monday that New York
investment firm Welsh, Carson, Anderson & Stowe had joined
other firms including America Online Inc (NYSE:AOL) in vying for
CompuServe.
H&R Block (NYSE:HRB) is trying to sell its 80 percent stake in
the on-line service and is holding out for better offers, the
Journal said.
Andrew Schwarz, senior partner at AGS Specialist Partners
at the American Stock Exchange said implied volatility in the
busy August 12-1/2 calls on CompuServe had risen to the 75 area
from the low to mid-60s.
"We're seeing a lot of retail call buying, specifically in
the Aug 12-1/2 line," Schwarz said.
The CompuServe August 12-1/2 calls were the most active
CompuServe option, with turnover of 525 contracts. The August
12-1/2 put traded 360.
In other trading, volatilities in Motorola options had
reached the mid-40 region, up about 10 points over the last
several sessions, ahead of the company's second quarter
earnings, expected Tuesday, Schwarz said.
"It's not rampant speculation," he said, referring to
earnings expectations. "There's nothing crazy going on."
Analysts' consensus estimate for Motorola's second quarter
profits is $0.56 a share according to First Call.
E-mail: derivatives@reuters.com |
