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To: Amy J who wrote (79110)	4/14/1999 5:50:00 PM
From: Ibexx	Read Replies (2) \| Respond to of 186894

Amy, Before I dig up some pertinent references (currently away from my library), take a look at INTC's option chains for the month of April: cboe.pcquote.com Pressure points are strikes 55 to 65, calls as well as puts. The pros have software/mathematical model to determine which closing price at expiry would serve their best interest. Last week, they appeared to concentrate on killing the relevant puts, and this week they have been focusing on the calls. With CPQ/AMD cooperating, things worked out (for them) like a dream. Will post some more references when I return. Ibexx (logging on remotely)

To: Amy J who wrote (79110)	4/15/1999 7:17:00 AM
From: GVTucker	Read Replies (2) \| Respond to of 186894

Amy, RE: options and expiration This thread will hate to hear this, but MM's do not manipulate the price of stocks close to expiration. The reason that stocks tend to "lock" on to a strike price is more the result of the dynamic hedging process that options floor traders employ to keep their books balanced. Contrary to what a lot of people believe, options market makers do NOT position options. They constantly try to maintain a risk free position, so that they can make money off the spreads. Thus, when someone comes in to buy a call, a market maker will sell that call to the customer and simultaneously try to also buy a put and short the stock. This puts the market maker in a risk free position until expiration. Often times, this is not possible, and the market maker has to engage in a process called dynamic hedging. This means that the closer to the money an option is, the more shares of a stock that the market maker must short to balance out the option position. Close to expiration, this means that as a stock price approaches a strike price, the market maker is forced to short more shares. Yet when the stock crosses over the strike price, the hedging process reverses, and the market maker needs to start buying shares back. The net result is that the price tends to converge around a strike price. This has nothing to do with a max pain point or anything like that. In fact, the market makers don't care what the price of the stock is. They're just trying to maintain a hedged position.