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Strategies & Market Trends : Tech Stock Options

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To: donald sew who wrote (36919)	3/17/1998 11:25:00 PM
From: sergio	Read Replies (1) of 58727

Look at the put/call ratio on both OEX and SPX and even extend that to the less traded index options for the past month. I have seen that more puts are being bought for insurance, so yes I don't see the market tanking big time this week, perhaps next week, barring any major news such as Yeltsin death or collapse of Indonesia. Notice the big deep in the money trade of SPX Sept 1050 call and puts Sept 1075 call and puts averaging nearly 120 pts each and near 8k contracts each. So 120x100x8kx4, 384 million? Assuming this is all buy. If done as both spread 1050/1075 call 1075/1050 put spread where would the break even be? At 1067 on up makes tons of money! At 1065 and below makes tons of money. For 13 pts, ie 13x100x8k, 10.4Million plus comish, six months, will double perhaps triple the money?? Anything between 1065 & 1067 nearly loss $10.4 mil, but what is the chance it will stay near that range in six months? Comments are appreciated. Sergio

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