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Technology Stocks : Tekelec -- Ignore unavailable to you. Want to Upgrade?

To: WTSherman who wrote (1464)	4/8/2000 4:22:00 PM
From: lml	Read Replies (1) \| Respond to of 1648

Hi WT: Your raise some very interesting questions, & I am eager to learn more about your analysis on this one. Notwithstanding the possibilities you mention, is not the threshold question to ask the one in your closing statement . . . at "what price these positions were opened at or when"? IMHO, it is unlikely these bets were made recently as a month ago, because they would be fairly expensive & risky positions to take. Would it not make most sense that these positions were opened during a period when TKLC made a significant move up into the 30s, beyond its historic trading range? Well, thanks to your heads up, I did a little research & my hunch was right. According to quote.com, the volume of the Aug 35 calls clicked up the week of Feb 7, following the Q announcement; the volume on the Aug 25 calls clicked up a month earlier (no surprise) on Jan 3. Now, are these trades bullish or bearish? I'm not that experienced in options. Perhaps you can share with me your insight. Could they be bullish & indicated of a very well-informed individual(s) who purchased these Aug 25 calls in January, then after confirmation of the prospects for TKLC, to an even larger position in Aug 35 calls after the TKLC moved into the low 30s essentially for good? If so, then why August? Could this individual have been astute enough to forecast a correction in the market that was arguably overdue & didn't want to squelch his open call position by going with Apr or May contracts? Is this individual so astute that he know there is something more positive about to break between now & August that would surely minimize his risk, and if anything, increase the value of his positions? Who would take the other side of the trade? The MMs? Perhaps that is why we have seen so many shorts come out of the woodwork recently. Somebody has the other side of these call positions &, as it stands now, is going to get taken to the cleaners. What can these guys do? IMHO, you can only drive a good stock down so far for so long. Eventually buyers will come in to support the stock. Perhaps there were these interests waiting for the right time (ie. Tuesday), when general market forces were strongly down, to quickly push TKLC to the 30 1/2 level we saw & cover some of their positions on these written calls. I could go on & speculate. But my intent is just to put out my thoughts, & more importantly to hear yours and others.