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

To: chic_hearne who wrote (106954)	4/20/2000 11:31:00 AM
From: that_crazy_doug	Read Replies (1) \| Respond to of 1574854

<< With "Max Pain" being significantly lower than the current $77, what does this mean for the stock? To me, it signals that once we get through the expiration we may not get another chance to buy AMD below $80 until after a split. >> Most people who still have options would have to exercise them and sell them today correct? I'm not sure what the open interest is, but right now volume seems light, so if 2-3 million shares need to be sold due to cash out of options we could be in for some real trouble towards the end of the day. (my understanding of this is mediocre at best, so if I'm way off base, I'd love to get someone more enlightened to explain) Right now, the only options I have left are July 60s, and Jan 100s. I'm still hoping they create some Jan 150s or Jan 200s. On the other hand, it would seem that after expiration we should start drifting upwards. If volume stays light, it may take awhile, but a series of slow moves up seems likely. (a point or two a day unless there is big news)

To: chic_hearne who wrote (106954)	4/20/2000 2:08:00 PM
From: Petz	Respond to of 1574854

chic, re:max pain and AMD. Any of the following factors mess up the normal max-pain analysis. 1. Many of the calls at 65 and above may have been written by retail investors holding lower strike price calls, rather than purchased as speculation. I myself fall in this category! I wrote almost as many 65's and 70's as I bought of the 55's. So the market makers may be "long" many of the high strike-price calls and "short" the low strike-price calls. In that case they wouldn't want the price to go below the ones they own! 2. The large number of calls that will be exercised (and not dumped the same day) by the retail holders actually puts upward pressure on the stock price. Institutions may have written these, even SPX index funds, and they can't let their stock disappear. 3. A lot of the open interest probably disappeared yesterday. The drop spooked a lot of people into selling their calls to the market makers below fair value, even below parity. 4. The long weekend may encourange more people to exericse their calls and not sell today, especially in a margin account. 5. The stock is close to an all-time high, so the momentum players are pushing it up. Of course, we know that the fundamentals are stellar, so the max pain graph is already "tilted" way to the right. That "marble" may fall in the 75 or even the 80 crack (see Message 13230296 for an explanation of the marble, peanut butter and Paul Engel). Petz