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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: still learning who wrote (2848)	7/30/1998 2:08:00 PM
From: djane	Read Replies (1) \| Respond to of 7342

thestreet.com on TLAB/CIEN options today thestreet.com Options Buzz: Ciena Puts Fly in Early Swan-Dive By Dan Colarusso Senior Writer 7/30/98 12:49 PM ET This morning's opening bell must have sounded like a fire alarm to Ciena (CIEN:Nasdaq) shareholders, who pounded the stock down 4 points in the opening half-hour of trading. "Bye-bye Ciena," said one options trader watching put buyers charge the market. The wave of doomsayers pushed volume on Ciena's August 75 calls to 870 in the first hour of trading, before the company's stock began recovering from its 76 1/2 low point. In the midst of merging its operations with Tellabs (TLAB:Nasdaq), Ciena is vulnerable to any wrench in the deal. This time around, however, the dip was prompted by an analyst report citing an AT&T (T:NYSE) move away from a Ciena product. That was enough to start the morning free-fall. The information that AT&T had decided not to deploy Ciena's 16-channel products and was exploring a 40-channel product was not new. It was reported in a Tellabs proxy statement on June 21. The statement said: "AT&T has recently indicated to Ciena that the capacity requirements of its network have grown to such an extent that the delays in final certification and approval for deployment of Ciena's customized 16 channel system would make actual deployment of that system inadvisable, and that AT&T would accordingly be shifting to an accelerated evaluation of commercially available, higher channel-count systems." In a report today, Warburg Dillon Read analyst Nikos Theodosopoulos said the AT&T decision "opens the door for other competitors to pursue AT&T." He also added that the risk appears low relative to the firms' overall revenues, "but the uncertainty as to the outcome may cause some impact to the stock." Tellabs also lost some ground today but didn't see much options traffic as a result. Over the past three days, rumors have proliferated that Bankers Trust (BT:NYSE) was being pursued by Deutsche Bank and that J.P. Morgan (JPM:NYSE) was the object of Credit Suisse's affection. There are no new rumors today but the bank sector is trading higher and options activity is percolating. Around midday, Bankers Trust was up 1 7/8 to 113 1/4 and traders were seeing interest in its September 110 and 115 calls. The 115 series was busier, with volume of 700 and a price jump of 1 3/4 ($175) to 5 3/4 ($575). J.P. Morgan was just as active, with investors taking a flier on its August 135 calls, but more likely buying the September 135 calls, which posted volume of 550 by midday. Paul Foster, options strategist at 1010WallStreet.com, said he's still not expecting a quick deal involving J.P. Morgan: "The theme is there but I don't know what the timing is." "J.P. Morgan is a little more active, the volatilities are higher, and the talk is spreading more," he said, adding that some of the call volume could be call writers "selling into the strength" of the sector. That could have been the case with Chase Manhattan (CMB:NYSE), whose August 75 calls traded more than 2,300 contracts. The bank's stock was up 2 5/16 to 74 7/8 near midday. After yesterday's manic rise in Stratus (SRA:NYSE), takeover talk has quieted. The stock reached 30 at one point today but settled in at midday up 1/2 to 28 5/16. The August 35 call action cracked 300 contracts against open interest of just 67. The price of the contract rose 1/8 ($12.50) to 1 ($100). See Also OPTIONS BUZZ Whispers of Ascend-Stratus Deal Perking in Options Market 7/29/98 1 PM TOP STORIES No New Tale to Tellabs 7/16/98 1 PM OPTIONS BUZZ ARCHIVE