Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Ron Flanigan who wrote (1642)	4/26/1998 5:29:00 PM
From: D.J.Smyth	Respond to of 9523

Ron, despite your dislike for options, one trick to descerning what is happening is watch the action of the stock price relative to the price of the call nearest earnings. If they are moving diametrically (i.e., stock is dropping while call is rising in price) you can sometimes tell that the professionals are shorting the stock while going long the call. once the stock drops to their perceiced price point (support level), the stock begins rising, sometimes dramatically while the call now languishes. eventually both catch each other and move in tandem if there is any solid basis for the stock rise. professionals that clearly anticipate earnings increase and are very familiar with the "inside" story will tend to buy calls over buying the stock (greater potential return). this "trick" may change, though as more people become familiar with how calls work. this method works better with different volume trading levels in stocks.