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Strategies & Market Trends : Tech Stock Options

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To: Patrick Slevin who wrote (43682)5/20/1998 4:40:00 PM
From: Frank Vessella  Read Replies (2) of 58727
 
Can anyone help me concerning Stock Options?

I am a beginner with Stock Options, so please be patient. :-)

This is only an example so the figures may not be right.

If Stock ABC is trading at $50.00

Calls
Month Strike Bid Ask Open Interest

Jun 50 2.00 2.50 500
Jun 55 1.00 1.50 500

Puts
Month Strike Bid Ask Open Interest

Jun 50 2.00 2.50 500
Jun 55 7.00 7.50 500

Questions:

1) If all of a sudden you see a transaction of 3000 contracts of Jun 50 Calls at 2.50, what does this indicate?

2) If all of a sudden you see a transaction of 3000 contracts of Jun 55 Puts at 7.00, what does this indicate?

Can someone please answer each question. Basically, what I am trying to figure out, does the volume and open interest give an investor any indication as where the stock is heading? If you also know of any site where I can get more info. concerning open interest and volume or options all together, I would greatly appreciate it.

You can post the answers on this forum or you can email me the answers at frankv@iname.com

Thank you in advance
FV
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