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Technology Stocks : FORE Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Bruce L who wrote (8914)	7/17/1998 11:48:00 AM
From: N.Sullivan(SULLY)	Respond to of 12559

Hi Bruce Thanks for your thoughts.If that is the case would we not see the price spool up toward the end of the day? I would take that as a positive sign. Also new upgrades will most likely attract new institutional funds into this sector.IMHO Looks sound to me.Any thoughts anyone else? Good Trading SULLY

To: Bruce L who wrote (8914)	7/17/1998 4:59:00 PM
From: Just Johnny	Read Replies (2) \| Respond to of 12559

Bruce, it was once explained to me by an old broker that the option market works alot like a booky. If too many bets are placed on one side then a booky lays off bets to minimize his risk, he places bets with other bookies to reduce his exposure to a large potential lose. In the options market if too many bets are placed on one side ie. July 25 calls for example, those who run the market and take your bets will lay off their risk by taking proceeds and buying the actual stock. If the stock moves up to say 27 in value and it looks as if they will have to pay out a large amount, they begin to place sell orders on their stock holdings to gravitate the price downward so they pay out less all the while making a nice profit on the sale of their stock holdings. This profit is used to pay out any options that are exercised. Using this example lets say that a lot of people figured that FORE would have good earnings this quarter so they bought July 25 calls expecting the stock to shoot up. The option folks are taking in a lot of bets on this and not many bets on the put side of things so they begin to buy FORE stock at in the low to mid 20's. Now, one week before options expire and the stock is up in 26 land they begin selling it at a profit and at the same time start to push the price back towards 25. Sweet isn't it? Hope this sheds some light on why the market does what it does sometimes. JJ