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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: IngotWeTrust who wrote (2592)	5/8/1998 8:34:00 AM
From: Ben Antanaitis	Read Replies (2) \| Respond to of 21876

49er, It's not too surprising, really. The Max-Pain effect is what's called a second order effect ie it operates in the absence of other factors that can swamp out it's effect. It's like an ocean current, when there is no wind and a boat's engine is turned off, you tend to drift in the direction of the current. But if a wind comes up, or you start the engine, they have an instant overriding effect. Now LU has been riding the crest of momentum and positive news, esp last month, hence the big divergence between where it closed on expiry day and the Max-Pain point. There were also a large number of 'grandfathered' options that were written before the split and the subsequent run-up. DELL is exhibiting similar characteristics this month, take a look at the big bucks on the line for the the MAY'98 options holders of DELL. But back to LU, this month the divergence isn't that big, things aren't quite as frenetic, the stock is ~71 3/4 and Maxie says $70. So, it will be interesting to see what happens between now and next Friday.... but ain't it nice to have an additional piece of info that might give you a clue to the thinking of the big* money players*? And it will give us another data point in the tracking history. Ben A. PS Jim McM asked me to look into seeing if Max-Pain could be applied to the XAU, any interest? (<--like waving a bone at a JYD ;-)) )