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To: brian z who wrote (42058)	2/23/1999 7:04:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164687

U.S. OPTIONS/Equity call demand resumes CHICAGO, Feb 23 (Reuters) - Demand for equity calls resumed on Tuesday morning even as the stock market fluctuated sharply during Federal Reserve Chairman Alan Greenspan's Congressional testimony. The S&P 100 <.OEX> was up 4.07 points to 639.32 by 1038 CST/1638 GMT, after an initial downward spike to 630.87. Stocks cut opening gains and tumbled in the early going as Greenspan told the Senate Banking Committee during his Humphrey-Hawkins testimony that equity prices were high enough to raise questions about overvaluation. "We're seeing some cross-currents, but the market seems to be very resilient. Yesterday's momentum was substantial," said Jay Shartsis, director of options trading at R.F. Lafferty & Co. He noted that after a short respite last week, strong call buying returned on Monday's rally and continued through this morning's session, suggesting that investors remain optimistic about the prospects for the stock market. Scott Fullman, chief options strategist with Swiss American Securities, said he was recommending that his clients -- mostly foreign money managers -- write (sell) calls against their holdings. "For stocks that have declined sharply, like Dell <DELL.O>, we're recommending writing out-of-the-money puts to take advantage of the premium," he added. Fullman said a positive sign for the market was that the Market Volatility Index <.VIX>, which measures implied volatility of several strikes on OEX options, remained below the closely watched psychological level at 30.00 on the earlier selloff. It was down 0.35 point to 26.45 at midmorning, which was viewed as neutral, having climbed as high as 28.30. Shartsis noted that the Dow <.DJI>, the S&P 500 <.SPX> and OEX were just a short distance from their record highs set earlier this year. "We could very well see new highs. If we did, those highs would be widely unconfirmed and could be a big sell signal," Shartsis added. REUTERS Rtr 17:04 02-23-99