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

To: tony sidhu who wrote (26793)	10/23/1997 10:10:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (1) \| Respond to of 58727

based on info I heard on TV it is open at 10 est... edit:it is open...s&P futures dec contract is up 2.75 right now..yeah! and last check on HS..up 251 and climbing...guess those Hong Kong call buyers knew what they were doing...lets hope it follows through glad I kept my 1 950 call! Thursday October 23 5:05 PM EDT U.S. OPTIONS FOCUS/U.S. investors bet on HK bounce CHICAGO, Oct 23 (Reuters) - U.S. options investors were betting on a bounce in Hong Kong stocks Friday, buying calls in the Hong Kong option index. ''The orders in the Hong Kong index (.HKO) have been bullish,'' said Tom Peters, a managing director at Susquehanna Investment Group, which is the specialist in HKO options at the American Stock Exchange. ''Everybody is buying calls and selling puts,'' he said. The bullish action comes after Hong Kong stocks dropped 10.4 percent overnight as pressure on the Hong Kong dollar led interest rates sharply higher. The benchmark Hang Seng index (.HSI) fell 1,211 points to 10,426, posting its fourth consecutive daily decline. The HKO finished 24.37 points down at 210.54. Peters said volume in HKO options was relatively heavy. ''Everybody seems to be expecting the bounce, or they're speculating that that's the way it's going to go,'' he said. ''Needless to say, there's a ton of uncertainty out there.'' The uncertainty, combined with the selloff, drove implied volatility in HKO options sharply higher, with front-month volatility reaching into the 70 percent area, from the mid-30s recently, he said. ''Volatility's literally three times as high as when the market was rallying, but you'd expect that,'' Peters added. Among the options, the November 250 call, which had open interest of five contracts, traded 192. The option dropped 2-5/8 to 5-3/8. The November 240 call, with open interest of 49, traded 113 contracts. It fell four to 7-1/2. The most active HKO put was the December 235, which traded 85 contracts. It had open interest of 485 contracts and surged 12-7/8 to 28-5/8. Activity was steady in the December series, but trailed off in the January, March and June series. In addition to the HKO index, some of the action in Hong Kong stocks traded in the U.S. and their options also indicated that investors were expecting a bounce, Peters said. ''All the bellwethers out there are expecting a bounce,'' he explained. ''This morning they all opened lower than their Hong Kong close last night and so during the day sentiment has changed around.'' Surprisingly, investors were not waiting to see how the U.S. stock market fared before betting on a recovery in Hong Kong. ''U.S. stocks are getting creamed, yet the Hong Kong stocks are all looking higher than their Hong Kong close,'' Peters said. ''People seem to be thinking it's a bit overdone in Hong Kong.''