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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Paul Fiondella who wrote (23141)	7/20/1998 12:33:00 PM
From: Spartex	Respond to of 42771

Paul: I think you're right, regarding the open interest on Fri. 12.5 calls. That could explain the 550-600K of early volume on NOVL this morning (assuming the standard double counting of nasdaq traded shares). So the question now stands, did this drop lead to some continued nervous selling? Hell if I know! I have noticed that the MM's are trying to scare up more shares in the 12 11/16s to 3/4 range. Seems they are moving the bid around a bit. Definitely a strange Monday for NOVL, while CSCO and LU push into triple digit land, joining their brethren MSFT, DELL, and IBM. Regards, QuadK

To: Paul Fiondella who wrote (23141)	7/20/1998 12:42:00 PM
From: Ben Antanaitis	Read Replies (2) \| Respond to of 42771

Paul, Autoexercise is not a theory, it is a fact-of-life of the options trading mechanics. Read the CBOE and the OCC rules of options trading, you cannot trade options without being subject to the rules. The CBOE statistics on Saturday show the numbers of contracts that were 'in-the-money' and what strike price they were written at. What someone paid for them is not relevant when you have been autoexercised. If they were 'in-the-money' by any amount over the brokerage houses autoexercise threshold, they were autoexercised. Per my last post, the $7.5's and the $10's were all autoexercised, some fraction of the $12.5's may not have been deep enough 'in the money' to be autoexercised. So there are 30 $7.5 contracts and 2608 $10 contracts plus some large fraction of the 2811 $12.5 contracts that were delivered to new owners this morning for purchase. This gives us ~500K shares being offered to buyers at the given strike prices+commissions. Could/did they purchase and hold or did they dump? I haven't a clue. But something spiked the price down on selling pressure this morning. And you did ask for opinions. Ben A.