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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Gerald Walls who wrote (31664)	11/4/1999 9:48:00 PM
From: Keith A Walker	Respond to of 74651

Gerald, Whew, not all wet, but IMO don't place too much credence on PUT/CALL vols. Just like one should not put too much value on the short position in a company. The people buying puts are probably 1) speculating on the outcome of the judge's "Finding of Fact" 2) nervous longs protecting their downside 3) possibly just nervous investors concerned about what the Fed does on Nov 16 (options expiry is on the 19th) and using MSFT puts as a proxy against the market heading south isn't too bad an idea. Almost like shorting and buying puts on QQQ. Market makers in the options are definately hedging by going short on MSFT when they write the put. A naked put is just a bull trying to get a little extra cream off the top. Doesn't this mean that if The Announcement isn't this weekend and these buyers close out their long put positions then the MMs will unwind their hedges by buying back the stock? This is a big assumption. The buyers of the puts may have bought the puts to hold to expiration. In that case, the MMs won't unwind any hedges. No theory involved, just some pragmatic speculation. Hope that helps. Keith