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

To: Kenya AA who wrote (39299)	12/8/1998 8:36:00 PM
From: Kenya AA	Read Replies (1) \| Respond to of 97611

From TSC on CPQ Options Trading .... Options Buzz: Compaq Options Hang as San Francisco Power Fails By Dan Colarusso Senior Writer 12/8/98 2:12 PM ET The day was shaping up to be another barn-burner for Compaq (CPQ:NYSE) options this morning until someone pulled the plug on Northern California. With the Pacific Exchange options floor in the dark, trading desks had nowhere to direct orders in Compaq, Microsoft (MSFT:Nasdaq) or Bankers Trust (BT:NYSE), three of the busiest option listings that trade exclusively in San Francisco. So how does one get off a trade? "You don't," said one big player in New York who deals frequently in high-tech stocks and options. "You have to do it over the counter." The over-the-counter options market is private and available only to major institutions that trade through one of the bulge-bracket securities firms in New York. The options floor at the Pacific was closed, according to an exchange spokesman, but the exchange's equity floor in Los Angeles was operating. There is no backup floor for options trading and indications were that the P-Coast's merger partner, the Chicago Board Options Exchange, wasn't going to pick up any of the trading that was left suspended by the outage. Any decision on the reopening process won't be made until power is restored, the spokesman says. Compaq, which has been in the midst of a rally and subsequently strong options volume, was again among the busiest today, until the lights went out. The stock was trading up 5/8 to 42 5/16 at midday. "The volatility of Compaq options is high," says Paul Foster, the strategist for 1010WallStreet.com, an information service associated with Chicago-based Mercury Trading. "The bulls and the bears are fighting it out. There are people that aren't believers anymore with the stock at all-time highs." Foster branded the early trading "aggressive" and saw buyers hitting Compaq's calls and puts. The December 40 and 45 calls were busy, but the January 45 calls saw volume climb to more than 9,100 contracts in early action as the price jumped 5/16 ($31.25) to 1 7/8 ($187.50). Compaq bulls had been out in force, driving a run to over 40 from 32 1/2 on Nov. 30. Volume was also brisk, although not breakaway, in the puts. The January 42 1/2 contract posted volume of more than 670 contracts and the December 37 1/2 popped to 722. On both sides, Foster says, the in-the-money options implied volatility levels were higher than normal. Unusually, in-the-money contracts' volatility was higher than their out-of-the-money counterparts', reflecting sentiment that was at best unsure. "The high volatility [of the in-the-money options] shows that people are not comfortable with either position," Foster said. The lack of options availability held the possibility that trading in underlying shares of exclusivley listed options such as Compaq and Microsoft could be affected. "There's a lot of risk reduction that can't be done," says CIBC Oppenheimer options strategist Michael Schwartz. "Right now you can't open or close a position, but you can exercise an in-the-money option because the stock is available." If an investor, for instance, wanted to buy Compaq stock but offset the purchase by selling Compaq call options, they'd be unable to complete the second leg of that trade. The Securities and Exchange Commission has long been a proponent the multiple-listing of all options, and these days, each of the four options exchange can list all new options issues. There are, however, a select number of options that only trade on one exchange. The CBOE exclusively trades IBM (IBM:NYSE) and the American Stock Exchange exclusively trades Intel (INTC:Nasdaq), and the Philadelphia Stock Exchange owns the Dell (DELL:Nasdaq) listing. "We can't blink our eyes at this one," Schwartz says. "It's a risk and an inconvenience if you can't transfer your risk. It is an issue that is going to be dealt with in the merger."

To: Kenya AA who wrote (39299)	12/8/1998 8:38:00 PM
From: Kenya AA	Read Replies (1) \| Respond to of 97611

From TSC - Edelstone on Semis .... Edelstone raised his price targets on eight semiconductor stocks Tuesday. The Ax: Edelstone Is Getting Buoyant on Semis in '99 By Eric Moskowitz Staff Reporter 12/8/98 3:31 PM ET Who are you going to believe? That's the question facing semi stock investors as the industry heads into 1999, which analysts promise will be the best year since 1995. Of course, analysts made similar projections last year as well. But this time it seems as if investors have a number of positive indicators to justify their bullishness over the last two months, which has seen the Philadelphia Stock Exchange Semiconductor Index shoot up 85%. Stabilizing PC average selling prices, key analysts and the latest industry data seem to indicate that this year's second quarter was indeed a "trough" for the entire industry, as TSC's ax, Morgan Stanley's Mark Edelstone, has been saying for some time now. Edelstone raised his price targets on eight semiconductor stocks Tuesday, including Intel (INTC:Nasdaq), which he has been pounding the table for since the spring. "We believe the industry is in the early part of a multiyear cyclical expansion," Edelstone told TheStreet.com. "We believe revenues for the overall semiconductor industry will grow 8% to 10% sequentially in the fourth quarter." Edelstone also sees that January will mark the first month where the industry will have a year-over-year increase in revenues. "By the second quarter of 1999, we expect to see a 15% to 20% year-over-year increase," he adds. The SOX was up 10 points, or 3%, to 360 Tuesday morning. Edelstone's yearlong nemesis, Merrill Lynch's Thomas Kurlak, continues to express caution about revenues next year. Kurlak points out that total semiconductor unit sales in October were down 4.2% from last year, which is a larger decline than the 2.1% drop in September. "The stocks are up on a spike with seasonally higher PC sales," Kurlak wrote this morning. Kurlak also included some particularly pointed advice for those looking to get into this semiconductor run at this point. "We are probably at the apex of seasonal consumer demand right now. It seems to us to be foolhardy to buy most semiconductor stocks." Kurlak wasn't immediately available for comment. But Kurlak isn't the ax anymore. His thinking jibes with Edelstone and, for that matter, the rest of the Street, which also was busy raising estimates Tuesday. Milind Bedekar, an analyst with Salomon Smith Barney, raised his price targets for semi-equipment plays Applied Materials (AMAT:Nasdaq) and KLA-Tencor (KLAC:Nasdaq). Bedekar has strong buys on the two stocks. His firm hasn't done any recent underwriting for Applied Materials, but it has done some for KLA-Tencor in the last three years. Kurlak's opinions are still crucial, primarily because he has been a perennial Institutional Investor all-star, and he could still be right in an against-the-grain sort of way if demand stabilizes after the holiday season and doesn't continue to ramp. But the facts speak for themselves. The latest data coming from the Semiconductor Equipment and Materials International showed an increase in its closely followed book-to-bill ratio from 0.57 in September to 0.73 in October. A book-to-bill of 0.73 means $73 in orders were received for each $100 worth of products shipped. While the ratio is not above 1, which is where a healthy book-to-bill ratio should be, the result is the first increase in the ratio all year. The book-to-bill, which measures U.S.-based semiconductor production equipment suppliers, stood at 0.97 in December 1997. A ramp in demand is not only good news for some of these beleaguered semiconductor and semi-equipment companies, but for PC stocks as well. All of the major PC stocks, excepting Apple (AAPL:Nasdaq), were up significantly Tuesday at 1 p.m. "We believe that if we have a benign PC pricing environment, revenues in the industry will continue to accelerate," says Edelstone.

To: Kenya AA who wrote (39299)	12/8/1998 8:41:00 PM
From: Kenya AA	Respond to of 97611

And you thought he didn't read SI ... From Cramer this afternoon: Random musings: Some spirited Wavephore (WAVO:Nasdaq) debate on the Silicon Investor boards that would be so much better without the ad hominem attacks. Funny, debate on the Net is a mixture between incredibly conscientious people trying to sort out the fundamentals and understand the trading (two very different things) and people who lost money at the casino and would like nothing more than to indulge in a little name-calling and finger-pointing. To read these boards is to believe that I had a massive stake in knocking Wavephore down, which is amusing in that I had NOTHING AT STAKE AT ALL!!