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

To: Michael Ulysses who wrote (31707)	11/5/1999 11:12:00 AM
From: codawg	Respond to of 74651

From thestreet.com about MSFT option trades. The downside bias is good news for those of us that are long. It means we'll see an even bigger move up Monday if everything comes together as I expect it will: >>Separately, one day ahead of an expected judge's ruling on the government's anti-trust case, Microsoft (MSFT:Nasdaq) options are turning up a bias toward the downside. Not surprisingly, investors were falling over themselves to get a piece of the options action in Microsoft. At-the-money options revealed calls were far more expensive than puts, but both put and call prices for November 90 strike had been bid up in price. November 90 calls were trading at 4 5/8 ($462.50), up 1/4 ($25), while November 90 puts were up 1 1/4 ($125) to 2 5/8 ($262.50). Microsoft closed trading Thursday at 91 3/4, down 5/16. Pay attention, though: Investors bid up both puts and calls, but were willing to pay up more for puts -- generally bets that the stock will fall. Michael Schwartz at CIBC Oppenheimer said he was sticking to his strategy of the past few weeks. "I recommended an uncovered put sale in, for instance, the December 90 puts, currently selling for 4 1/8 ($412.5) for those people willing to own the stock at 85 7/8." (That's the stock price minus the premium taken in for selling the option.) His firm simply doesn't believe the government will call for structural change of the software giant. So it views any selloff in the aftermath of the decision as a buying opportunity, he adds. "I made that recommendation on Oct. 29 as a substitute for buying the stock outright. And I still would today"<<