Semi Equipment Analysis Message Board

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Technology Stocks : Semi Equipment Analysis

SOXX 299.81

+2.7%

Dec 19 4:00 PM EST

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To: Return to Sender who wrote (13695)	3/3/2004 10:41:35 PM
From: BWAC	Read Replies (2) of 95616

Just to suggest for discussion: <The VIX/VXO/VXN and all other measures of fear> < total put to call ratio has not closed over 1.0 in over two months> Does the time value of the option have anything to do with this? I find that time value is extremely low. Low enough that selling an Option is hardly worth the risk. Low enough that buying an Option is very cheap insurance. Some Call examples: AMAT stock is $21.20 A March 20 Call is $1.50 which is 30 cents of time premium. Go out to April 20 Call for 30 cents more. Would you sell a call for that return? Or would you rather buy one for that 30 cent risk? Same with KLAC at $52.10 For $3 you can get a March 50 Call, 90 cents time value. Add another $1 time value to get an April 50. Then just sit around and flip shares short all day possibly. For your 30 cent/90 cent risk. So is the Call buying a lack of fear? Or a money management strategy? Or just part of a hedging strategy? With time value components being so low, I think its a bit under analyzed to just dismiss the numbers as showing historical "lack of Fear". As for the Put/Call ratio itself. Lets break that down from today. Total Put/Call Ratio 0.71 Index Put/Call Ratio 1.24 Equity Put/Call Ratio 0.60 Further almost a 3:1 Put to Call ratio on Options on the Nasdaq 100 Index Tracking Stock - (QQQ) Call Put 17147 51349 The Index options sure show fear?

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