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Strategies & Market Trends : Canadian Options -- Ignore unavailable to you. Want to Upgrade?

To: Steve Bevington who wrote (1446)	12/23/1999 6:26:00 AM
From: Porter Davis	Read Replies (1) \| Respond to of 1598

>>just wondering if you have any predictions... Murphy's Law. (I'm not 100% convinced that BCE really will empty the cupboard by spinning off Nortel; this could still be part of the spin effort to raise BCE's price). Anyway, based on past experience, what would happen is all currently extant BCE options would have a deliverable of 100 shares of BCE and X shares of NT (whatever the ratio is that Bell 'butterflies' out), and a new parallel class of options would be listed which would be Bell stock ex-distribution. It would be interesting to see what valuation the market puts on BCE without Nortel--it obviously can't be less than zero, which is sort of the discount currently priced in. Anyway, the propeller-heads would then set up arbitrage programs between BCE, NT, and all three option classes which would definitely keep us on our toes (and fry my brain). I don't know how to describe the action in BCE and the trading in BCE options for the last few months except to say I've never seen anything like it. How high is high? I don't know, but I do know that every time I've decided to short BCE it's cost me big-time. Wall-to-wall call buyers, which is the diametric opposite of normal. We keep raising the vol and the public keeps buying. BCE is trading like a dot.com stock; almost like Ballard did a few years ago. I'm happy to see this board come back to life a little. This is an unprecedented period in options in Canada--opportunities abound. I just hope the move to Montreal doesn't cock it up. Happy trading. (and Merry Christmas) Porter