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Technology Stocks : BAY Ntwks (under House)
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To: cbstock who wrote (6795)7/3/1998 9:05:00 AM
From: Ben Antanaitis  Read Replies (2) of 6980
 
cbstock,

Well, there are now two weeks left till BAY July'98 options expiration. I have updated and posted the Max-Pain graphs for Bay with last night's CBOE data.

The Max-Pain point is at $30 even with the current price at 32 1/8.
It looks like there is a large amount of optimism in the call side of $30, with the put side being a defensive play against some form of disappointment.

There is a lot of 'inertia' built into the open interest of any stock. Contracts are sold, premiums accepted, a lot of it months in advance. The Max-Pain point can shift during the time I look at it, but usually only within one strike price range, and then not very often. Major momentum events just swamp the effect out and the open interest gets blown away. It may turn out that in those months that are 'earning report' months the indicator doesn't hold at all.

Ben A.
ez-pnf.com
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