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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: onurbius who wrote (11290)	7/11/2000 11:28:53 PM
From: wopr1	Read Replies (1) \| Respond to of 24042

Implied volatility in Options: I got this on my Schwab alerts. I dont understand options, what does this mean? w3.qurio.net 5:05 PM ET 07/11/00 U.S. Options - Vols drop as JDS Uniphase falls CHICAGO, July 11 (Reuters) - Implied volatility fell on Tuesday in options on fiber optic equipment maker JDS Uniphase Corp. even as the stock lost more ground. "Vols have been crushed," said Paul Foster, investment strategist, 1010wallstreet.com. "People are trying to increase income by selling vols" as the stock drops. He pegged the August 95s at about 70 percent, down from around 80 percent on Monday. "It's in about 10 vol points," agreed the designated primary market maker at the Chicago Board Options Exchange. On Monday, JDS Uniphase said it would buy rival SDL Inc. in a stock deal worth $41 billion. Under the agreement, 3.8 shares of JDS Uniphase will be exchanged for each SDL share. SDL will operate as a wholly owned subsidiary of JDS Uniphase once the transaction closes. The deal requires shareholder and regulatory approval. "It's different, almost the opposite of what it should be," the DPM said of the move in implied vols with the stock also dropping. "This takeover basically for a while is going to put a cap on the stock...and the volatility probably will never, ever move like it used to." The DPM characterised Tuesday's options volume as "moderate" and activity as "pretty mixed," noting that turnover seemed busier on Monday. "There are some buyers," he added. "The options are cheap." On Tuesday in only the July and August 95-140 strikes, roughly 30,355 calls and 9,680 puts changed hands on the four U.S. options exchanges combined. The August 95 calls, which fell 2-7/8 to 4, had combined interexchange volume of about 6,180 on open interest of 1,252 contracts. Stock of JDS Uniphase, based jointly in Canada and California, ended down 5-7/16 at 95-11/16 on 40.6 million shares. Stock of California-based SDL closed down 2-11/16 at 318 on Nasdaq market volume of 7.6 million. -wopr