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To: Jeff Jordan who wrote (38733)	3/10/1998 10:05:00 PM
From: Glenn D. Rudolph	Respond to of 61433

U.S. OPTIONS FOCUS/Wal-Mart, NorTel collars Reuters Story - March 10, 1998 21:31 %DPR %ENT %BUS %AUT %ELI %ELC %CA %RET %US %DRV %STX %.N/OPT WMT %MRG NT NTL.TO LU CSCO C .VIX .OEX V%REUTER P%RTR CHICAGO, March 10 (Reuters) - Large institutional hedging strategies, rather than momentum players, boosted volume in equity options on Tuesday, despite a sharp rally in stock prices, traders said. Besides some big vertical and calendar spreads, some institutional investors were putting on huge "collars" -- or put buying partially financed by call selling -- and also revising such positions that they already had, traders said. Wal-Mart Stores Inc June 55 calls and June 50 puts traded more than 5,000 contracts each, most of it in a collar spread originating from a large institution. "They sold us the calls and they bought the puts," said a market-maker at the Chicago Board Options Exchange (CBOE). "They're giving up the stock above 55 but they're protected below 50." He said the strategy was basically a low-cost hedge for the stock, which was off 1/4 on the day at 51 after having risen from a January 26 low of 38-2/16. In Northern Telecom Ltd , March 47.5 calls and March 42.5 puts traded a little over 5,200 contracts each as an end-user bought the calls and sold the puts to get out of an old collar position. The stock was up 1-1/16 at 55-5/16 on the New York Stock Exchange, extending its recent gains from a January 23 low of 39-11/16. "Someone did a spread about six months ago, and they're just rolling out of their position," said Mark Eisenberg, a trader on the CBOE floor. The CBOE crowd immediately bought the stock to square their positions after the options deal, he added. Most of the other heavily traded options were also institutional spreads, most of them plain vertical call or put spreads, traders said. Lucent Technologies Inc March 110 and 115 calls traded over 6,200 and 5,300 contracts respectively, with the big chunks recorded as spreads. Cisco Systems Inc March 60 and 65 puts had some 5,800 and 6,700 contracts changing hands, while Chrysler Corp April 35 and March 40 calls traded about 6,300 and 4,300 respectively. Overall, traders said the market appeared to be regaining confidence after recent pullbacks, and implied volatilities were generally off. "It's another one of those days when the S&Ps go up 10 (points) and hold for three hours and then go up 12," said Jay Shartsis, director of options trading at R.F. Lafferty & Co. "Yesterday seems to have been another short-term shakeout." March S&P futures ended 11.00 points higher at 1065.00, near its record high of 1067.20 touched earlier in the day. The CBOE volatility index , which reflects implied volatilities for near-month S&P 100 index options, dipped back below the 20.0 level again and finished at 19.60, down 0.66 point on the day.