To All:
CHICAGO, Nov 11 (Reuter) - Trading in Novell Inc
options remained heavy Monday after Friday's hectic,
rumor-induced activity, traders said.
But activity in options on another rumor-induced stock,
Dime Bancorp Inc cooled, they said.
Novell and Dime rallied on Friday on various takeover
rumors and both companies declined comment.
Network software systems developer Novell, which surged
2-1/8 Friday, was off 7/8 at 10-5/8 at 1200 CST (1800 GMT)
Monday.
Dime shares, which ended up 3/4 after climbing as much as a
point Friday, eased 7/8 to 15-5/8.
Novell stock remained busy as it topped the Nasdaq's most
actives list, with turnover of about 6.3 million shares.
Trading in Dime shares slowed. Consolidated volume was
roughly 771,000.
With both stocks down, call premiums shrank accordingly
after being bumped up on Friday, traders said.
On Friday, Novell options volume totalled 22,064 contracts
compared to average daily volume of 2,000 contracts and Dime
options volume totalled 14,540 contracts compared to 362 on an
average day, according to Lawrence McMillan, who publishes The
Option Strategist newsletter.
In both cases, the bulk of the trading was on the call side
as the shares rose. Options traders said most of the volume was
buy orders.
"All it was was speculation," one options source said of
Friday's action in Novell and Dime. He added that most of the
takeover rumors were vague.
"Whatever it is, somebody was shaking things up," he said.
Traders also noted that both companies are mentioned as
takeover targets fairly frequently.
One trader noted that Dime shares rallied a point at the
beginning of October on takeover talk but nothing materialized.
By 1200 CST (1800 GMT) Monday, the most active Dime option
was the December 17-1/2 call, which traded 816 contracts. With
the stock down, it fell 7/16 to 11/16.
About 6,100 contracts were added to the December 17-1/2
call's open interest Friday, pushing the total to 6,372.
The Dime December 15 call traded about 440 contracts
Monday, down from nearly 2,700 contracts last Friday.
For Novell, the November 12-1/2 call was most active, with
3,100 contracts traded. It fell 7/16 to 1/16. The November 10
call, with about 1,900 contracts traded, fell 7/8 to 3/4.
Traders said investors may be liquidating positions ahead
of Friday's expiration.
In the December series, the December 12-1/2 call was most
active. It traded more than 1,000 contracts and eased 50
percent to 1/2. Its open interest, including an addition of
about 5,320 contracts Friday, was 6,546.-Gregory Crawford,
(312) 408-8750
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