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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Finder who wrote (13347)	1/16/1998 3:05:00 PM
From: craig crawford	Read Replies (1) \| Respond to of 45548

I understand the theory you are describing Finder but I don't believe in it too much. Just about any scenario could be covered using your theory. If the strike prices are only spaced 2 1/2 points apart and you claim the stock will trade within 3/8 of those strikes then COMS has about a 50% chance of satisfying your argument (the same odds as flipping a coin). An example: Strikes of 32.5 and 35 32.5 + .375 = 32.875 32.5 - .375 = 32.125 35 + .375 = 35.375 35 - .375 = 34.625 So in essence COMS would need to finish anywhere between 32.125 and 32.875 or 34.625 and 35.375 to satisfy your argument. The total range from low to high is 32.125-35.375 or 3.25 points. Your theory covers a range of 1.50 points or almost 50% of the total possible range. My guess is you've got a 50/50 chance of your "theory" being true. That about jives with the anecdotal evidence I've gathered. I've seen times when stocks have closed within 3/8 of the strike price and I have seen just about as many times that it hasn't. Come up with a new conspiracy theory, Finder.

To: Finder who wrote (13347)	1/16/1998 3:54:00 PM
From: jhild	Read Replies (1) \| Respond to of 45548

Well, Finder I agree there is an effect called "pinning" contrary to whether others want to try to dismiss or ignore this effect. I think of it more as a "gravitational effect" where the greater the number of contracts open the greater the liklihood that it becomes a self-fulfilling prophecy. Volume hasn't been too great this afternoon in COMS, and the price is a likely easier to move. But it has a ways to move to either strike. It's hard to see exactly where the price will go at this point, it seems to be about in the middle between the strike prices. This one may pin today. But we'll see in about 10 more minutes if there is a sudden move to confirm your opinion.