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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Joel R. Phillips who wrote (26742)	10/23/1997 2:08:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (1) \| Respond to of 58727

US OPTIONS FOCUS/Index put buying steady, no panic CHICAGO, Oct 23 (Reuters) - Put buying in major U.S. stock indexes was steady but not heavy Thursday as investors took a calm view of the market's selloff, traders said. ''In the OEX (S&P 100 index), there's a mixture of buyers and sellers,'' said Jack Callahan, an independent market maker at the Chicago Board Options Exchange. ''There's no heavy panic put buying by any stretch of the imagination.'' U.S. stocks sold off sharply amid further turmoil in Asian markets, led by Hong Kong stocks, which slumped 10.4 percent overnight. 913.31, more than five points off its session low. Among other measures, the S&P 500 (.SPX) lost 14.21 to 954.28 but was above its 948.21 session low. December S&P 500 futures, which fell to 949 early, were off 15.05 at 959.30. The blue chip Dow industrial average (.DJI) shed 146 points to 7,889. It hit a session low of 7,858. December Dow futures were down 145 at 7,930 after dropping to 7,750, a contract low. An SPX futures-options trader at the Chicago Mercantile Exchange said there was a panic mood off the opening but as the market recovered, the fear subsided. He said a couple of firms were the biggest put buyers, with one buying about 1,000 November 810 puts and another buying roughly 1,500 December 850 puts. On the flip side, put sellers were fairly busy but were not doing big orders. Callahan added that after the initial drop, call buyers emerged fairly quickly. ''Invesotrs are aware that often these drops are buying opportunities,'' he said. Overall in the OEX, put volume led call volume by 22,438 to 20,188 at 1100 CDT/1600 GMT. In the SPX, put volume was more pronounced, with put turnover totaling about 36,400 contracts compared with call turnover of 17,250. The market's selloff drove volatilities sharply higher, but Callahan said that was a natural reaction. The CBOE's volatility index (.VIX), a measure of volatility in OEX options, was up 3.09 points, or 14.1 percent, at 24.99. It spiked to 26.36 early. ''We got pretty low in the range (of the VIX) with that recent runup, so it's not surprising volatility went up,'' he said, adding that volatility expands rapidly when stocks fall. Traders said the options activity was not providing many clues as to investors' expectations for either a recovery or futher selloff. Jerry Hegarty, an options analyst at Thomson Financial Services, said in a midday report that the market's overall direction is lower but a ''phony'' late rally is possible. But Callahan said he expected the market to stabilize after bouncing off the session lows. ''We're starting to get wider ranges,'' he said. ''We've been in a narrow range for a bit here and now we might be stepping into wider ranges -- higher highs and lower lows.'' More news for related categories: stock capsules, options, international.