Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (38927)	4/12/2001 3:31:48 PM
From: 2MAR$	Respond to of 50167

Options Report: Volatility Down Ahead Of Holiday Weekend By Cheryl Winokur Munk Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Volatility kept falling Thursday as options investors continued unwinding positions ahead of the long weekend. Some investors harvested profits from this week's Nasdaq Stock Market rally, while some others looked for buying opportunities. Volume was relatively light, however, with a number of traders closing positions early in the morning, because the options market is closed for Good Friday. Traders played both sides of the market and "nothing aggressive on either side," said Larry Alintoff, a partner with Gotham Investments, a New York hedge fund. Options investors appeared unfazed by data that showed U.S. March retail sales posted the largest contraction in four months, while wholesale prices sank only slightly in March and a University of Michigan report on consumer sentiment showed continued weakness. The Chicago Board Options Exchange's market volatility index, or VIX, continued its recent downward movement. It fell 2.32 to 30.41. The index, which serves as a barometer for investor sentiment, typically stays in a range between 20 and 30. Tim Biggam, chief options strategist at Man Financial in Chicago, said he doesn't expect to see VIX fall much more until after earnings season ends. Though some companies have already reported quarterly earnings, a stampede of them report next week. Of course, it's hard to forecast whether VIX will, in fact, continue to drop. If the market hovers in bear market territory for awhile, investors may lose interest and the VIX could drop drastically to 1994 levels when it mostly ranged between 10 and 15, said Todd Salamone, director of research at Schaeffer's Investment Research. But if there's a big market decline in which people hedge portfolios at any cost, VIX could soar, Salamone said. In the market Thursday, volume continued to be fairly heavy on options of the Nasdaq 100 Trust - or QQQs. More than 36,000 April 40 call contracts traded, compared with open interest of 161,436. Much of the volume was on the CBOE and the American Stock Exchange. These calls were up 90 cents to $3.00 on the CBOE. At least one investor likely opened a new position buying 18,000 contracts of Schlumberger Ltd.'s April 85 protective puts on the CBOE, along with stock - a strategy also known as a married put. These contracts traded at $23.40. The stock traded recently at $61.58, up $1.40, or 2.3%. Also at the CBOE, at least one customer likely sold several thousand contracts of Veritas Software Corp.'s May 40 puts, with these puts down 25 cents to $1.65. The stock traded recently at $60.27, up $1.52, or 2.6%. The investor, who collects a premium for selling the puts, likely believes that Veritas's stock will not fall below 40 by mid-May or is willing to buy stock at that price. Elsewhere in the options market: - The CBOE's put/call ratio for equity options was 0.62. Contrarians - who think that when too many in the market are bullish, then the smart move is to be bearish - think the indicator sends a bullish signal when it is above 0.75, neutral from 0.4 to 0.75, and bearish when below 0.40. - The CBOE's put/call ratio for index options was 1.15. Contrarians consider this indicator bullish when it is above 1.50, neutral when between 0.75 and 1.00, and bearish when below 0.75. The Philadelphia Stock Exchange said Thursday that it had record equity options volume for the month of March when 9.7 million contracts traded, up 78% from the year-ago period. -By Cheryl Winokur Munk, Dow Jones Newswires; 201-938-2123; cheryl.munk@dowjones.com (END) DOW JONES NEWS 04-12-01 03:30 PM * end of story *