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To: Mad Bomber who wrote (3581)	8/19/1999 4:17:00 PM
From: zurdo	Respond to of 10027

I could be wrong...it wouldn't be the first time....so far, though that is what I see....It may take a little longer than 2 weeks....I don't see NITE regaining its former glory, though...Just my opinion...

To: Mad Bomber who wrote (3581)	8/19/1999 4:36:00 PM
From: Herschel Rubin	Read Replies (2) \| Respond to of 10027

Since Friday is double-witching expiration of options and futures, there may be some incentives for the forces that be (MM's and options specialists) to coax NITE to a pre-designated closing price tomorrow. Of course, this is primarily done by shorting against a low-volume day (like I thought today was going to be). If there is a charge of buyers into NITE, they can't stop it. The usual Max Pain calculation that people employ to guess where the optimal Friday close would suggest that (Friday Close at $35=Max Pain). But this algorithm only is valid to the extent that we can assume ALL calls and ALL puts were provided by the specialist (implicitly, that means, they had to hedge against each and every contract). However, that is not always the case: 1. Some of those Puts may have been written by MM's such as FBCO themselves as they allegedly manipulated NITE's price down a few weeks ago with heavy shorting. 2. And some of the calls might be covered calls written by people like you or me, in which case, the options specialist has nothing at risk and therefore no incentive to bring NITE's price down at expiration. So although we can tally the total Open Interest on all put/call contracts and run a Max Pain calculation, the degree to which the options specialists and MM's are hedged is what matters. The overwhelming call open interest (in conjunction with the fact that individual investors who were so excited about NITE going to $90 probably weren't writing a high percentage of those calls against their long shares) suggests that the options specialists DID have to hedge a large percentage of the Call Contracts. Furthermore, I would wager that Put options in the August series were bought by "smart money" (e.g. the FBCO's of the world) who were shorting NITE all the way down. I would therefore conclude that the very same forces (MM's) who may have bought the Puts are the ones that might need the Auggie 30 calls to expire worthless and reduce the Auggie 25's premium at expiration tomorrow. In other words, if the Puts are in "hostile hands," the open interest of Puts actually INCREASES the incentive for MM's to bring NITE's price lower because (they or their cronies) have a vested interest in seeing NITE as low as possible at expiration. The way it looks, the market makers may force NITE to revisit the high 20's tomorrow, if not for options expiration, perhaps for a cleanout of stop loss orders.