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

To: Backfill who wrote (47740)	7/13/1998 10:25:00 PM
From: ViperChick Secret Agent 006.9	Respond to of 58727

<<<The OI wont change until the next day. If this is true they would have to be buys.>>>> no they could be sells to open with the thinking of AVI wont go over 30 ------------------ CHICAGO, July 13 (Reuters) - Implied volatility on S&P 100 options (^OEX - news) edged a little higher Monday after falling last week to its lowest level in over a year. The Market Volatility Index (^VIX - news), which measures the implied volatility of several strikes on OEX options, ended the session up 1.20 at 18.99. The index last week sank to its lowest level since April 1997. Traders linked the bounce in volatility to a selloff in U.S. Treasury bonds and uncertainty over the impact of the resignation of Japanese Prime Minister Ryutaro Hashimoto on Japan's plans for economic reform. Hashimoto resigned today in the wake of his party's electoral defeat Sunday. The benchmark 30-year cash bond closed 27/32 lower at 106-9/32, pressured in part by views that new Japanese leadership could speed the recovery and thus curtail safe-haven buying in U.S. assets. The OEX, meanwhile, nudged to a new all-time high of 571.19 and ended just off the high at 569.97, up 1.67. The Dow Jones industrial average closed down 9 at 9,096, while the Nasdaq composite index rose 22 points to 1,965, its fourth consecutive record close. An OEX trader called the slight rebound in the VIX modest and said it was constrained because the OEX appeared to struggle to eke out today's new high. Stock volatility tends to rise when the market declines. Jay Shartsis, director of options trading at R.F. Lafferty & Co., said the VIX appeared to be establishing a new range at lower levels. In general, deflated put premiums due to lack of hedge demand were capping volatility, he said. ''There's no fear. It's showing there's a lot of complacency,'' Shartsis said. CHICAGO, July 13 (Reuters) - Implied volatility on Intel Corp. (INTC - news) options rose Monday and calls traded actively one day before the company is expected to report second-quarter results. Volatility in the July 80 strike was bid at 50 percent and offered at 57 percent, up from 43 percent traded Friday. July equity options expire Friday. August volatility was holding steady at about 34 percent. Intel is expected to release its second-quarter earnings results after the close of trading Tuesday. ''Everyone's in there taking a guess,'' said Larry McMillan, president of McMillan Analysis Corp. The stock was up 1-7/8 at 81-5/16 in the afternoon and has been on an upward path since bottoming near 65 in early June. ''There's obviously optimism that the earnings are going to be good,'' said Jay Shartsis, director of options trading at R.F. Lafferty & Co. A Piper Jaffray analyst Monday raised his earnings estimate for Intel to $0.70 per share from $0.62. The First Call consensus estimate is $0.68. More than 17,000 calls in the July 75 strike in Intel had traded by midafternoon, and large volumes were seen the July 80, July 85, August 80 and August 85 strikes as well. The heaviest put concentration was in the July 80 strike at almost 6,700 contracts. ''It's heavy, but not way out of the ordinary,'' said an options broker of all the volume in Intel options. Speculators are placing both bullish and bearish bets in Intel options, trying to anticipate the outcome of Tuesday's earnings release, he added. "We've got people playing it both ways," he said. The broker said active put buyers today in chip makers Micron Technology Inc. (MU - news) and LSI Logic Corp. (LSI - news) may anticipate a negative surprise from Intel dragging down the whole sector.

To: Backfill who wrote (47740)	7/13/1998 10:28:00 PM
From: SE	Read Replies (1) \| Respond to of 58727

Actually, I am not sure that means anything. They could be a buy and a sell (cover) or a sell and a buy (cover) or a spread of some sort or simply an open buy or an open sell. Yes, for every buyer there is a seller. However, open interest is simply those that have not yet closed... and that number we would not know until tomorrow. Perhaps OI doesn't change and everyone bought and covered today. -Scott