Options update for 3 Nov...the most boring 235 point rally ever.
Yep, sure was fun to see Inco and Abx rocket to unchanged closes. Bell put on some kind of rally, but nothing to write home about. Ballard had about a $2.00 range, but zero options traded. Must be the massive publicity the TSE put on to announce the four new options classes listed today. Did you miss it? So did I. Wasn't mentioned on their fancy new Website. Welcome to the nineties, TSE! There, Jan, the sound of one hand clapping. BTW, the instructions for finding options quotes contains this user friendly instruction: "enter a fully-qualified symbol"! (Hint: it's BLD.K.B for Nov 80's. Intuitive, No?)
The options summary for ABX, N, and BCE is the same for all--the call volatility is way high and staying there. Only three lines out of all of them had any selling, and there was solid buying in many. In my opinion this is the time to put on ratio-writes or calendar spreads, with disciplined stop-loss points on the down side.
A little house-keeping:
Mike, I don't know where you can find historical option prices electronically; the TSE Daily Record has them (check a library for back copies). This is the type of useful purpose they could put their Website to--try e-mailing them with the suggestion.
Philip, I can't specifically comment on stocks as to whether I think they should be bought or sold. The OSC takes a very dim view of that. When I discuss my stocks I always try to frame it in terms of what I am doing--not what I think others should do.
Daniel (via e-mail), the two numbers I enclose in ( ) after each stock represent the implied volatility for the calls and puts that we are using in our option pricing formula. Your excellent question about how we hedge, or avoid taking a position we don't want will, I'm afraid, have to wait til I have more time. I will try to get to it.
Happy trading.
Porter |
