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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Dalin who wrote (3562)	8/17/1999 5:13:00 PM
From: Herschel Rubin	Read Replies (1) \| Respond to of 10027

Dalin, yes, we may see more weakness in NITE because of options expirations this Friday (although today's close was decent). In spite of the abundance of good news surrounding the brokerage sector, we haven't been able to get to $40 too easily (where NITE belongs). Maybe the news about NDB (Analyst Marks gave it a $100 price target) today will stoke some interest in the sector. Yet, based on NITE's lack of reactivity to recent news, I suspect we may have to do some work at these price levels, particularly when we factor options expiration into the picture. There is significant Open Interest on August NITE Call Contracts that the market makers will want to see expire worthless. In addition, there are fewer Put Contracts with significant Open Interest which are in the money. In fact, the MM's who sold NITE calls to investors all the way down are going to pocket some nice change - There is huge call open interest relative to puts if you total all open interest for all contracts all the way down the August series from the Aug75's to the Aug25's. At this Friday's options expiration, the determination as to which price the MM's want to close NITE is often based on their "max pain" algorithm which determines the optimal Friday closing price. My seat-of-the-pants guess -- based on open interest at various strike prices -- would be an optimal Friday close between $29 7/8 and $34 7/8. There does seem to be enough open interest in call contracts (for which MM's often have taken the opposite side of the trade) that it may be worthwhile for MM's to short NITE down as we approach Friday. Furthermore, it may be especially easy for the MM's to keep a lid on NITE until Friday with low trading volume expected this week as traders/investors/institutions take a wait-and-see approach for the FOMC meeting. We'll see... Comments?