BOSTQ at 3/4, That's about where I came in at. Hold/Fold?
any thoughts or info? Anyone following the Bankruptcy?
- - Traders using put options to wager that Boston Chicken Inc's. stock price will decline to zero must
be feeling pretty lucky. The chain of chicken restaurants, involved in Chapter 11 bankruptcy proceeding,
reported a decline in customers in the fourth quarter, and cautioned that margins and sales are should to
decline.
The stock fell 3/8 to 13/16, which increased the value of some put options. Earlier in the week, several
traders who collectively controlled about 10,000 puts rolled Jan. 5 puts that expire in 1999 to the same
strike that expires in 2000.
Meanwhile, the company faces a Nasdaq hearing on Nov. 19 that could ultimately lead to a decision by
the exchange to delist Boston Chicken's stock.
The earnings report sparked another wave of trading in the January 5 puts that expire in 1999 and 2000
puts. The 1999 puts gained 3/8 to 4 3/8 on volume of 3,070 contracts, compared with open interest of
33,930 contracts. The 2000 puts gained 1/2 to 4 1/2 on volume of 1,050 contracts, compared with open
interest of 13,293 contracts.
But the future may not be as grim as it now appears. For as the company's chairman said in the
quarterly earnings report, "It will take time before the impact of our Chapter 11 filing wears off and
customers realize we still have nearly 900 stores serving the chicken America loves.' - Steven M.
Sears; 201-938-5355 |
