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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (86756)	1/12/2000 5:01:00 PM
From: tejek	Respond to of 1577883

It would seem that the call-option buyers agree with your call on Intel. ____________________________________________________________ Intel's (INTC:Nasdaq - news) earnings, for instance, are luring call-option buyers on Wednesday ahead of earnings due out after the close of trading Thursday. Investors who buy calls are expecting a positive earnings announcement to boost Intel's stock price and, naturally, the options' price. In these times of 20-point daily moves for many stocks, however, that strategy gets riskier for professionals on the other side of such trades. Put/Call Ratio Today (Noon) Previous Close 0.37 0.35 Source: ILX "I'm too shy to write [sell] these things [options] yet," said Jay Shartsis, option strategist with R.F. Lafferty in New York. "Usually at this point ahead of expiration, I would be a seller of these things. But stocks just don't seem to trade on fundamentals anymore." With Intel shares up 3 13/16 to 93 1/2 at midday, its January 90 calls were among the most active on the trading floors Wednesday. The price of those calls was up 7/8 ($87.50) to 4 3/4 ($475) on volume of more than 4,000 contracts. Those who thought more good things might be in store were looking at the out-of-the-money January 95 calls, which traded 3,300 contracts and jumped 1/2 ($50) to 2 3/8 ($237.50). On the other side of the aisle this morning, few Intel puts traded, indicating that investors were expecting positive earnings, especially in the wake of a lofty 150 price target set for the company by Credit Suisse First Boston analyst Charlie Galvin on Tuesday and a rally in the shares. The professional option traders who sell these aren't stupid; they will bid up prices ahead of earnings knowing that investors want in ahead of the news. But "no longer can we safely bet that the stock price will come down after earnings," Shartsis said. Those who sell (or write) such options are vulnerable to a large move in a stock that makes the options they sold even more expensive and obligates them to fulfill their end of the contract at a loss. Traditionally, stock-option price speculation heightens around a potentially important short-term move in a stock. Traders are happy to sell any options to investors because they are betting on the old axiom that investors will buy the rumor and sell the fact, thus leaving the options sold to expire worthless to the buyers.