U.S. OPTIONS/VIX soars, rumors lift 3Com, others
Reuters Story - September 10, 1998 19:50
CHICAGO, Sept 10 (Reuters) - Implied volatility on stock index and most equity options surged on Thursday as the market
suffered another big spill, but a handful of stock options saw their volatility levels sprint ahead amid takeover rumors, traders
said.
Among them were 3Com Corp. and Ascend Communications , which were rumored to be possible targets of Intel Corp. .
Separately, Bergen Brunswig , Comsat Corp. and PSS World Medical Inc. were also at the center of takeover speculation.
"Vols are up in all of those (stock options), but it's really tough to measure now because there's a lot of anxiety about the whole
market," said Paul Foster, investment strategist and editor of 1010WallStreet.com.
The Market Volatility Index , which measures implied volatility of several strikes on S&P 100 options and is a good gauge of
fear in the market, spiked up 8.37 points to 47.36, just off the August 31 closing high at 48.33.
The OEX stumbled 13.66 points to 478.82, erasing almost all of what it gained on Tuesday.
Worries about President Bill Clinton's political fate, on top of turmoil in emerging markets and the impact of depressed world
economies on U.S. corporate earnings, are likely to keep the market under pressure for the foreseeable future, traders said.
Investors were looking to Friday when the House of Representatives was expected to release large parts of U.S. special
prosecutor Kenneth Starr's report on the Internet.
"This is terrifying," said Jay Shartsis, director of options trading at R.F. Lafferty & Co. "The rest of the world looks to the U.S.
for stability and we're facing the possibility of an impeachment."
He said heavy index put buying and the fact that the stock market comfortably held above the September 1 "panic lows"
suggested that selling may have been exhausted for now. |
