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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Nancy who wrote (45608)	6/11/1998 8:47:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (1) \| Respond to of 58727

Nancy here is Favors I think he means over the high at anytime but there has got to be a limit to that you would think... marketweb.com +Steve Sohn (23863 ) From: +David R Linn Thursday, Jun 11 1998 5:22PM ET Reply # of 23901 Steve, Or not.....<<some arbs are thinking that there's more upside gain than downside risk....>> *************** Options Buzz: Bears Move In on OEX Index Puts in Face of Triple-Witch By Gregg Wirth Staff Reporter 6/11/98 2:45 PM ET The shakeout in the overall stock market today meant that options traders were again staking their bets on blue-chip index puts, as activity in the Standard & Poor's 100 (OEX) and Dow Jones Industrial Average (DJX) was strong. With just a week before this month's triple-witching expiration, options traders were still busy in the June strike prices, apparently adding to their positions before expiration on June 19. With the OEX at 533.55, down 6.25, the June 535 index puts were the most active, trading more than 12,840 contracts. Also seeing action were the June 540s and 520s, with about 11,730 and 7,830 contracts trading, respectively. Michael Schwartz, options strategist for CIBC Oppenheimer, said it appeared that many of the trades today were new positions, as investors were adding to their holdings ahead of the triple-witch. "The 540s moved more than 10,000 contracts against only 16,000 in open interest -- that's very intriguing." Schwartz said he was watching the development of a put-bear spread on the OEX between the 540 and 535 index puts -- both of which are in-the-money. All this activity is a strong signal that traders are betting on a continued downturn, he added. It appeared that much of the action in the index puts was caused by traders buying the June 540s at around 9 and then selling the June 535s at around 7 to create a spread between the two prices. "They are taking a $2 deficit now, but if the OEX stays below 535 by expiration, they will win big," Schwartz said. Corresponding index call activity picked up in the late morning, with the June 540s moving 11,385 contracts and the 545s moving 6,445. Activity also was ripe in the OEX June 550 and 555 index calls. Pricing on the calls and puts moved in almost polar opposition, as calls dropped in price and puts rose. Joe Sunderman, senior research analyst at Schaeffer Investment Research, agreed that these new positions indicated that market players were not through with the June strike prices yet. "I think people are still watching the Asian fears and how they'll affect the market," Sunderman said. "The thoughts of triple-witching are not intruding yet." With the Dow down more than 100 points this morning, the DJX June 86 index puts moved more than 6,000 contracts -- an unusually high number for this index. The DJX index was 88.72, down 1. Dave