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

To: Doo who wrote (2899)	6/27/1998 9:06:00 AM
From: Ben Antanaitis	Read Replies (1) \| Respond to of 21876

Jeffry, The Max-Pain analysis deals with trying to get a feel for where the stock price might be on expiry day. This is based on a snapshot of the value of the open interest across a range of possible stock closing prices. Now, based on where the options MMs and the seller's of covered calls have written their contracts, there appears to be the potential for downside pressure on the stock price to 'guide' the price toward the Max-Pain point. But Max-Pain is a second order effect, and breaking news or earnings reports, or Greenspan, can cause a momentum effect that swamps out the 'natural attractor' of the Max-Pain point. There are also three weeks to go. So without giving investment advice, which I never do, I guess if it were me, I'd be watching the news and the price of LU like a hawk. I would also have a number in my mind (a mental stop) where I would 'walk away with a profit in my pocket' for any short term, time declining, investments I had. Ben A.