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

To: P314159d who wrote (18502)	4/11/2000 7:55:00 PM
From: Rich Wolf	Read Replies (1) \| Respond to of 21342

Pi, some options questions, since you seem to like the subject ;-) How do you suppose the options MMs hedge their risk, as the stock swings so dramatically through the strike prices ($25-30 now, $35 just a few weeks ago... sigh...) for contracts having open interest in the 3-5000 contract size range (300k-500k shares)? For the april call options there are 3500, 3700, and 4000 contracts for the 30, 35, and 40 strikes; and for the may call options there are 5000 may20, 3300 may25, 4250 may30, and 2200 may35. If they had shares to unload as we dropped through $30, because they had accumulated stock to deliver, no wonder we got dumped on... conversely... When I look at the steady options interest, both puts and calls, some bought and sold the same day, it seems there could be quite an extra volatility factor being added to our stock if the MM has to use some sort of 'program' to buy/sell real shares, just in case he has to deliver stock, etc. What do you know of how they do it in this biz? Do you think this is what is resulting in the greater volatility when the volume in the stock is lighter? If the naz would settle down, and the company had killer news to deliver (who can wait for May 18th?), enough to let us swing up towards 30ish again, man we're sitting on a ton of jet fuel that would shoot us back to 40 as soon as the options MMs get to work collecting the millions of shares they will need to deliver. Anyone else with thoughts on this? Regards, Rich