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

To: milan0 who wrote (88092)	1/19/2000 3:07:00 PM
From: Charles R	Respond to of 1576615

Mike, <I calculated the call to put ratio and it is almost 3:1. It seemed high to me until I calculated the same ratio for Intel: 3.1:1 which is even higher than for AMD> I bet the Intel numbers were a result of the recent earnings. Could it be that people are as bullish on AMD as they are on Intel? (says quite a bit about how far AMD has progressed in public sentiment, no?) <When I want to buy call options and nobody is willing to sell these calls, I believe the market maker himself writes the options. However, to protect himself, the market maker immediately buys common shares in equivalent amount to the written options. Conversely, if I resell my option and the market maker cancels the open interest, he will resell his common shares. That, in itself, could be a drag on the market toward the so called max pain point much discussed on the Intel thread.> I have a friend who used to be at options pit in Chicago. He used to tell me that hedging has become increasingly complex over time and he had to make some pretty convoluted trades to remain market neutral (guided by some fancy computer in the back-office I might add). After hearing from him a few times on that topic I don't even bother guessing what the options makers may or may not have done. <Right! I didn't catch that before. For Intel, the ratio of leaps to total options is much higher. Could that mean AMD investors think the big gap is about to happen very soon?!> I think we have a lot of folks playing the earnings pop as against being longer term investors. Just my take. Chuck