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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Steve Porter who wrote (19338)	7/17/1998 6:06:00 PM
From: matt fahy	Read Replies (1) \| Respond to of 45548

We were just discussing the option theory on Fore thread and it happened to fore today, opened strong and tested resistance at $26.5 and traded down to close at $25. My question is this: How do you know which side the MM are on, meaning did they sell covered calls, uncovered calls or did they buy calls when looking at open interest?

To: Steve Porter who wrote (19338)	7/19/1998 2:22:00 AM
From: Bruce L	Read Replies (1) \| Respond to of 45548

Steve: I'd like to articulate a theory/fact scenario as to another driving force for a pop in the stock Monday. At the end of the June options expiration COMS was in the 24-25 area. The big move up didn't occur until June 24-25 when earnings were announced. Many speculators and traders (including myself and Craig) bought July 25 and 27 1/2 call options. When the price fell below 30, many more 25 and 27 1/2 options were purchased. On last Thursday and Friday 3 or 4 analysts upgraded COMS to a strong buy. Let's concede that many of these options were written by MMs and that they tried like heck to keep COMS below 30(successfully). Still, many of the 25 and 27 1/2 options are going to be exercised - as they were in my case -and they are going to be exercised after the market closes and up to noon Saturday. Monday morning the MMs are going to find themselves short these exercised shares at a time when COMS is just gathering momentum anyway. Result: SQUEEZE TIME!