NYC, Here's my take on the numbers...
(1) The absence of put action is curious. If there were any kind of consensus that the stock would get hammered further, I would expect to see more E=20 or 25 puts at both dates.
(2) The preponderance of action in the calls has, I think two implications:
(a) There is some speculation associated with the rebound, and
(b) Those who covered their positions with calls at 30 or 35 have an incentive to unwind those positions now with a counterbalancing long position. After all, the calls are fairly deep out of the money now, and will gain little in value by further price declines, but will lose value as they head back into the money. This just amounts to day trading the calls rather than the stock.
My take on it is that The Street probably feels the Morgan Stanley valuation at $30 is a good, conservative estimate, and the price may go up from there as the uncertainty clears up. This is the only forward looking assesment that I know of as far as what the market thinks, as opposed to what the analysts think. I do not want to make too much of these tea leaves, however.
jess.
PS - see, i'm not the short-selling antichrist. ;-) |
