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

To: fellowfool who wrote (774)	12/9/1997 9:54:00 PM
From: Porter Davis	Read Replies (2) \| Respond to of 1598

Options update for 12/9...oops, so much for a rally. Well, nothing like a negative earnings report from a company like Oracle to kick the legs from under the market. T35 fared much better by comparison, even with golds and base metals getting slammed. At least Bell obliged by reaching $48 and change before back-filling. ABX: Barrick closed down another .85c. The good news is the front page article in USA Today proclaimed gold is dead. I agree it couldn't look much worse...but the absolute best time to buy something is when everyone else wants to sell it, because they always end up selling it too cheap. I'm not saying we've seen the bottom yet, but I believe you can see it from here. One or two more days of 'give-up' and I'm going to take a stand on the long side. Call vol went up again today; Jan22.4s are now 55 and well bid. Guess what my biggest short position is. (53,48) BCE: As I mentioned, Bell set another all-time high of $48.15 before settling back to 47.35. Good trading in the options, although almost all retail selling except for some decent buying in May 45s. I had to scramble a bit because in spite of what I said yesterday about staying long, I got shaken out of my position at $47 when NY started to crater. I expect more good trading tomorrow as clients roll up and out to keep the dividend. (25,26) N: Same as yesterday--no trading, no interest, weakened with the market. Something has to give. (42.5,40.5) BLD: Ballard had a $4.50 range today, and the vol dropped again as a client wanted to sell 100 Dec 90s and a 1000 lot sell was shopped. Why this stock's vol is so low compared to its historical volatility is a mystery to me, but I am happily building a long-call, short stock position. With the swings this puppy puts on, it's a natural. (42,42)(average). "Fellowfool" asked some questions that I think might be of general interest, so here are some answers: First off, I cannot comment specifically on ABX. Since I am the specialist, it would be a conflict for me to advise anyone, since I might well be the counter-party to any subsequent trade. However, I will make some observations: >I would like to buy back my ABX JAN32.5 puts (sold last July) Number one rule is your first loss is your best loss. You must have a strong constitution to watch a position go this far south. > I'm even considering selling more puts at the current higher price Number two rule: never average down(up) a losing position. Far better to cut your losses and live to trade another day. >-what is the "M" referring to as in ABX M35s and sold LBA M35s flat? The M is the month code for January puts. N=Feb puts, A=Jan calls, etc. > -why is this "flat"? Done at the same price. >-are the numbers in brackets more significant in their relationship >to each other than in absolute value? No, the first number is the implied volatility for calls, the second is puts. The number is the value we use in the option pricing formulae. Experienced traders watch the vols to see how they relate both to past levels and the historical vol of the stock. None of this is meant to be a criticism of Fellowfool, just answers to the questions. I've been keeping this tout sheet lying around for a few weeks, only because I want to steal the following: "This material is for your private information, and I am not soliciting any action based upon it. Opinions expressed are my present opinions only. This material is based upon information which I consider reliable, but I do not represent it to be accurate or complete, and it should not be relied upon as such. I may from time to time have a long or short position in, make markets in and/or buy or sell securities mentioned". Whew! I love that. That should keep the OSC off my ass. Happy trading. Porter Options specialist in ABX, BCE, N, BLD on the TSE. PS. I forgot to slag the TSE! How stupid of me. General slag. There, I feel better. The TSE management? Fish. Barrel. Bang.