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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Bill Harmond who wrote (9749)	11/26/2001 8:16:52 PM
From: Mark Fowler	Read Replies (1) \| Respond to of 57684

By Kopin Tan Dow Jones Newswires NEW YORK It is like a tale of two markets. Market bulls bought calls, especially on technology companies, as stocks overcame some concerns including a panel of economists who said the recession began in March. Meanwhile, with the major stockmarket indexes already up significantly from their lateSeptember lows, the more skeptical investors aggressively hedged their long stock positions with options. To these investors, recent upbeat news from some technology companies might hint the slide has slowed, but it doesn't necessarily mean a recovery will quickly follow, because no one knows how long the recession might last. At the Chicago Board Options Exchange, the ratio of index puts traded to calls rose to 2.53 as institutional investors sought downside protection across the broad market. This institutional sentiment gauge has exceeded 2.0 only four times since Sept. 11, and this was its highest reading. But the put/call ratio for equity options remained low at 0.53, although up from Friday's 0.48. In Sun Microsystems Inc., Palo Alto, Calif., an investor bought a large number of the January 15 calls. It isn't clear what drove the call buying, and the investor might be buying to close an existing short position. But Sun's calls had traded robustly in recent months as investors bought them to ride the stock's rise. In 4 p.m. Nasdaq Stock Market trading, Sun stock rose 49 cents to $13.30. The January 15 calls traded 20,308 contracts at the CBOE, compared with open interest of 95,156, and where they rose 20 cents to 70 cents. In Cisco Systems Inc., an investor bought a straddle by buying January 20 calls and January 20 puts. The investor might feel that a large move in stock price is possible by midJanuary but is unsure of the direction, so is willing to pay about $355 for each straddle to bet that Cisco, San Jose, Calif., will remain volatile. On Nasdaq, Cisco stock rose 34 cents to $19.93 and is now up 81% from its Sept. 27 low. At the CBOE, the January 20 calls gained 15 cents to $1.70 on volume of 11,524 contracts. The January 20 puts fell 25 cents to $1.75 on volume of 7,386 contracts.