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Technology Stocks : InfoSpace (INSP): Where GNET went!
INSP 134.73+0.5%Dec 3 3:59 PM EST
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To: Josef Svejk who wrote (1384)2/23/1999 3:06:00 PM
From: Sir Auric Goldfinger  Read Replies (2) of 28311
 
If you look at the history of volatile stocks, internet or otherwise, when options on a given stock begin trading, it becomes more liquid by virtue of the involvement of additional market makers in the form of options market makers who, be their very nature, are hedgers.

As well, they bring efficiencyto the spread which GNET has gotten narrower recently but used to be a point spread stock. Finally it allows people who would not otherwise short play it by via limited loss puts. The end result is that the volatility gets sucked out and the float increases by virtue of the fact that the MM's in the options (as well at the stock) do not need a borrow.

HTCH Hutchinson Technology is a great visual example of something that got a lot less volatile once options stared trading in it. Hope this helps.
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