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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (6097)	5/28/1998 4:30:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 6980

Options Report: Bay Networks Up On Takeover Rumor May 28, 1998 3:49 PM By Steven M. Sears NEW YORK (Dow Jones)--Takeover speculation on Bay Networks Inc. is defining trading Thursday in the networking-hardware company's call options. Speculators are buying June 25, 27 1/2 and 30 calls in the apparent belief that this months-old rumor will materialize and move the stock. Bay Networks stock is up 2 1/8 at 28 on heavy volume. Of the more than 27,000 contracts that have traded, more than 17,000 contracts have moved in these three calls. Average trading volume is about 6,500 contracts. The rumor on the Street is that Lucent Technologies Inc. is interested in buying Bay Networks, but others companies are interested in beating Lucent to the punch, said Paul Foster, options strategist, at 1010WallStreet.com. Other potential suitors are rumored to include France's Alcatel-Alsthom, Canada's Northern Telecom, and Ericcson Telephone Co. The implied volatility of the Bay Network's options, and trading volume, has been edging higher since last week, indicating an increasing likelihood that the price of the underlying stock will move up or down. Bay Networks' implied volatilities generally range from 49% to 69%. Foster said he can't recall them reaching such high levels. In the morning, the contracts had a volatility of 64% and they have since moved into the 78% to 83% range. The question, however, is to see if the volatilities can sustain themselves overnight, something Foster said hasn't happened in more than 18 months. The June 25 call is up 1 7/8 at 4 3/8 on volume of 5,586 contracts, compared with open interest of 14,427 contracts. The June 27 1/2 call is up 1 11/16 at 2 3/4 on volume of 7,261 contracts, compared with open interest of 7,088 contracts. The June 30 call is up 3/4 at 1 3/8 on volume of 5,995 contracts, compared with open interest of 10,893 contracts.