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

To: john dodson who wrote (6239)	6/4/1998 8:16:00 PM
From: Glenn D. Rudolph	Respond to of 6980

U.S. OPTIONS/Bay calls buoyant amid takeover talk Reuters Story - June 04, 1998 19:39 %US %DRV %STX %.N/OPT BAY DIGI ALA CGEP.PA CIEN TLAB %MRG V%REUTER P%RTR CHICAGO, June 4 (Reuters) - Calls on Bay Networks Inc. were active Thursday amid growing speculation that Bay will the next company in the telecommunications sector to receive a bid. The takeover bid for DSC Communications Corp. from Alcatel Alsthom of France announced earlier today and the offer for Ciena Corp. from Tellabs Inc. heightened speculation surrounding Bay, which has been the subject of takeover talk for weeks. Anticipation of an announcement also was high ahead of a telecoms conference in Atlanta next week, said Paul Foster, investment strategist and editor of 1010WallStreet.com. Volatility in the options has been buoyant all week. Implied volatility for nearby at-the-money options was trading around 73 percent, up from its average of around 55 percent, he said. "The June series is very expensive considering there are only two weeks and one day until expiration," said Jay Shartsis, director of options trading at R.F. Lafferty & Co. About 9,700 June 30 calls traded by 1255 CDT/1755 GMT. They were by far the most actively traded option contract on the Chicago Board Options Exchange. The June 35 calls were the second most actively traded, with almost 5,400 contracts changing hands. Call volume outpaced put volume by a wide margin of 27,500 to 1,700. "It looks like about 65 percent of these trades in the June 30 calls are new positions," said Joe Sunderman, an options analyst with Schaeffer's Investment Research. "People are not taking their chips off the table. The speculation is that a takeover is imminent." No one at Bay was immediately available to comment on the rumor. The stock topped the most active list on the New York Stock Exchange, with volume of more than 5.7 million shares. It was up 2-1/8 to 30-1/16, the highest level in more than three months.