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To: Ruffian who wrote (69245)	3/19/2000 10:15:00 AM
From: T L Comiskey	Respond to of 152472

Borrowed post QCOM mentioned To: edward_k who wrote (8122) From: blandbutmarvellous Sunday, Mar 19, 2000 12:06 AM ET Reply # of 8144 Here's an interesting and enlightening article re volatility and options. It was posted on the Yahoo CREE board this evening: Tech volatility by: sbaker99_us 3/18/00 10:06 pm Msg: 21138 of 21140 A piece in this week's Economist: Technology shares To infinity and beyond N E W Y O R K HAVING surged past the 5,000 mark last week, Nasdaq, that repository of all that is brightest in America?s new economy, was this week looking distinctly jaded. But an investor lucky enough to have held a favoured technology stock such as Rambus (up fivefold on the month), and who might have wanted to lock in his gains by buying a put option (the right to sell), would have had to shell out some 25% of the share?s value. The reason? Option traders are both being hurt by and contributing to an ever-more-volatile market. Volumes in equity options have surged. Last year, the American Stock Exchange (Amex) traded 4,000 options a day, on a security based on 100 of the most prominent non-financial companies listed on Nasdaq. This year, it trades 50,000. There has been a similar increase in options on individual shares. At the Pacific Exchange, daily volumes doubled last year to 300,000 contracts. They have risen by two-thirds so far this year. Has this surge in options activity been exacerbating movements in underlying markets? Volatility in the 100 most prominent stocks on Nasdaq has increased by a third over the past year. But the volatility numbers that traders plug into their models have increased far more than the actual increase in volatility would seem to warrant. The effect has been a huge increase in option prices. To cite one case, the cost of a put on Cell Pathways, an unprofitable biotech firm (up by 500% in the past year), is fully half the cost of its shares. This extra cushion that traders are demanding implies either that people expect markets to become even more volatile or, more likely, that traders no longer pay much attention to their pricing models. Why might that be? One of the more-or-less unrealistic assumptions that traders feed into those models is that markets are liquid. To hedge options that they have sold, sellers usually offset their positions by either buying or selling the underlying shares. This is not always possible, as was famously demonstrated in the 1987 crash. Dumping stocks in a market whose liquidity had all but disappeared drove the market down further. The recent problems faced by options folk have been of an altogether different sort: they have not been able to get their hands on shares on which they have sold calls (the right to buy). ?These stocks don?t crash down, they crash up,? said an exhausted trader on Amex. Traders saw the first sign of a change early last year. One recalls seeing shares in Yahoo! abruptly rise, then do so again and again. At one point, the Nasdaq screen which provides a list of bid and asked prices showed no Yahoo! shares being offered for sale at any price. Faced with a shortage of stock, options sellers panic buy; as they scramble to cover positions, they force prices?and volatility?higher. It has happened a number of times since in other shares. For some, the consequences have been brutal. A trader at Letco, an options market-maker, is said to have lost $30m after arranging a fancy options strategy on Qualcomm. Susquehanna Investment Group, another market-making outfit, supposedly lost $19m trading options on eBay. Though both deny the rumours, in each case, according to gossip, the problem was how rapidly shares rose. The more interesting question is what would happen when it is not offers that dry up, but bids. Egged on by options traders, equity markets might then become more volatile still.

To: Ruffian who wrote (69245)	3/19/2000 12:46:00 PM
From: JohnG	Read Replies (2) \| Respond to of 152472

Prarie.com announces GSM/CDMA chipset. 3/17/00 - PrairieComm's chipsets aimed at muiltimode Mar. 17, 2000 (Electronic Buyers News - CMP via COMTEX) -- Silicon Valley- Expanding its portfolio of cellular-phone ICs, PrairieComm Inc. recently announced a line of chipsets, including a multimode product that supports two digital standards, CDMA and GSM, on the same device. PrairieComm has also jumped into the third-generation wireless-IC market with a chipset supporting the cdma2000 standard, one of two protocols vying for dominance in 3G wireless networks. Announced at the recent CTIA Wireless 2000 trade show in New Orleans, the chipsets will enable a new class of wireless handsets, according to John Diehl, president and chief executive of PrairieComm, Rolling Meadows, Ill. The six-year-old company was founded by former employees of Cadence Design Systems Inc. and Motorola Inc. Until now, the company has focused primarily on producing chipsets for the TDMA digital-cellular standard. PrairieComm has sold more than 1 million TDMA-based chipsets to such companies as Mitsubishi and Panasonic, according to company executives. Now, however, PrairieComm is turning its attention to multimode chipsets. Last year, the company announced what it said was the world's first chipset to support GSM and TDMA on the same device. PrairieComm's new CDMA/GSM chipset advances the company's strategy. "The business model is rapidly changing," Diehl said. "In the future, handsets will not support a single standard. We believe the market is moving toward multimode handsets." The CDMA/GSM chipset supports several functions, such as Bluetooth and global positioning system technology. The company has not yet disclosed shipment or price information for this dual-mode product. PrairieComm will continue to produce single-mode chipsets, according to Diehl, including the recently announced cdma2000-based device for 3G handsets. The chipset complies with the 1x Multi-Carrier specification and is backward-compatible with CDMA standards such as IS-95A and IS-95B. Supporting wireless data rates at speeds up to 153 Kbits/s, the chipset, which is not yet priced, will begin sampling in the second quarter, according to the company. JohnG