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Non-Tech : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: BBG who wrote (53644)	4/25/1998 9:18:00 AM
From: Ben Antanaitis	Read Replies (1) \| Respond to of 58324

JD, No, that chart is just a graph of two curves: the cumulative value of all the May'98 calls vs the stock price on expiry day AND the cumulative value of all the May'98 puts vs the stock price on May'98 expiry day. The graph you want to watch is the bottom graph. It shows the SUM of the cumulative values of all the May'98 puts and all the May'98 calls vs the stock price on May'98 expiry day. The Max-Pain theory is that on expiry day the stock will 'gravitate' to the price that yields the largest number of worthless contracts in the hands of the option buyers: thereby maximizing the profit for the option sellers. This would be the minimum point on the second graph. It is a second-order effect ie other factors like breaking news, earnings reports, Greenspan, etc. can swamp out the effect. Case in point, look at the LU charts. But, when all things are equal, it looks like you can get a handle on where the stock price might end up a week or two ahead of expiry day. The technique is so simple, that anyone can track their favorites, as an additional piece of information to weigh when making the tough decisions with their own money. The technique is fully explained in the 'link' right below the table on the Options analysis page. Ben A. pipeline.com