Playing the *NEW* Phily Exchange Internet Index (.DOT)

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Technology Stocks
Playing the NEW Phily Exchange Internet Index (.DOT)

An SI Board Since December 1998

Posts	SubjectMarks	Bans
25	6	0

Emcee: gizelle otero	Type: Unmoderated

Introduction Compact

On 9 December, the Philadelphia Exchange started trading new Thestreet.com internet index options. The symbol for the index is .DOT

This index promises to be the most volatile index yet! Here is the news release and the stocks included in the index:

Wednesday December 9, 8:35 pm Eastern Time
Philadelphia exchange launches new Internet index
By Debra Sherman

CHICAGO, Dec 9 (Reuters) - The Philadelphia Stock Exchange and online financial information provider Thestreet.com, aiming to capitalize on the Internet craze, launched options trading on a new Internet index on Wednesday.

The index, called Thestreet.com Internet Index , gives speculators another opportunity to bet on the movement of a basket of 20 high-flying Internet stocks.

Some 800 options contracts on the index traded in about 50 separate transactions on the first day of trading, giving the exchange hope that this sector index will succeed where others have fallen short.

''We're encouraged,'' an exchange spokesman said. ''We've had a lot of interest.''

Yet stock-market sector indexes so far have not generated huge investor interest, said Jay Shartsis, director of options trading at R.F. Lafferty & Co.

''If this one isn't successful, I don't see how any of these sector indexes will be. How can you have a group that's this hot that doesn't translate into big volume?''

The American Stock Exchange, which has a pact to merge with the Philadelphia Stock Exchange, launched options on its Interactive Week Internet Index of 50 Internet stocks in October 1995, but it has found only limited interest.

Trading volume peaked in January 1996, registering 40,021 contracts for the month, or average daily volume of just 1,819 contracts. The latest surge in Internet stock prices in October and November generated only modest monthly volume of 10,809 and 13,932 contracts, respectively, in the index.

Thestreet.com spokesman Sean McLaughlin said one advantage the new index has over the AMEX's index was that the Thestreet.com's index of 20 Internet companies is equal-dollar weighted, meaning that the performance of small and large companies in the index will be represented equally.

The AMEX's index is weighted by capitalization, so Cisco Systems Inc. (Nasdaq:CSCO - news) accounts for 37 percent of the index.

Still, the Chicago Board Options Exchange's Internet Index , which is dollar-weighed, has had a similar lackluster history, attracting only limited interest. Year-to-date average daily volume has been just 32 contracts.

Tom Bartlett, a market maker in the CBOE index, said the exchange recently redesigned the index and plans to promote the index more aggressively.

''We're already seeing better results,'' Bartlett said, noting that about 350 contracts traded on Tuesday and about 400 traded on Monday.

Paul Foster, investment strategist and editor of 1010WallStreet.com, said he was optimistic about the prospects for Philadelphia's index.

"The reason these other (Internet) indexes haven't done well is because retail paper has been weak. But Thestreet.com has a retail following, so it's a nice tie-in," he said.

"Once the Philadelphia exchange merges, they'll have AMEX money behind the index for marketing. Thestreet.com index has a better chance of succeeding than the others."

The companies in the index are:

Amazon.com Inc. (Nasdaq:AMZN - news), America Online Inc. (NYSE:AOL - news), At Home Corp. (Nasdaq:ATHM - news), BroadVision Inc. (Nasdaq:BVSN - news), CMG Information Services Inc. (Nasdaq:CMGI - news), Checkpoint Software Technologies (Nasdaq:CHKPF - news), Egghead.com Inc. (Nasdaq:EGGS - news), Excite Inc. (Nasdaq:XCIT - news), Infoseek Corp. (Nasdaq:SEEK - news), Lycos Inc. (Nasdaq:LCOS - news), Macromedia Inc. (Nasdaq:MACR - news), MindSpring Enterprises Inc. (Nasdaq:MSPG - news), Netscape Communications Corp. (Nasdaq:NSCP - news), Network Associates Inc. (Nasdaq:NETA - news), Onsale Inc. (Nasdaq:ONSL - news), Open Market Inc. (Nasdaq:OMKT - news), Real Networks Inc. (Nasdaq:RNWK - news), Security Dynamics Technologies Inc. (Nasdaq:SDTI - news), USWeb Corp. (Nasdaq:USWB - news) and Yahoo! Inc. (Nasdaq:YHOO - news).

McLaughlin said the index was designed to include companies that derive a majority of their revenue from the Internet, so that it would be a "pure play."

But just how to play investor's enthusiasm for this index is anyone's guess - AND the focus of this thread!

Enjoy.

Go to reply# or date (mm/dd/yy):

Reply	Message Preview	From	Recs	Posted
25	Dot.com index rebalancing I thought there was a mechanism for rebalancing?	Mike C2	-	2/18/1999
24	The DOT just continues from inception, like the DOW. I am re-working the portf	gizelle otero	-	1/23/1999
23	Do you know if the portfolio (in the INDEX) is rebalanced at some time interval	jjs_ynot	-	1/12/1999
22	You can try it but will you like it? Over the weekend I was looking at the pre	Mike C2	-	1/11/1999
21	Proposing a Toast for this thread for the new year Here's hoping that we c	Mike C2	-	1/4/1999
20	Gizelle, I am an etrade customer and can't seem to get any quote let alone	Rich B.	-	12/27/1998
19	DOT down big time! Heroes -- BVSN, Goats - OMKT and ONSL down 10%	gizelle otero	-	12/14/1998
18	DOT - - NOON Update: LOSERS: EGGS, ONSL, OMKT all down more than 6% 19 stocks	gizelle otero	-	12/14/1998
17	CORRECTION - - I bought $1000.00 of each stock in the index. Portfolio now *AC	gizelle otero	-	12/14/1998
16	Portfolio now ACTIVE - - I "bought" $1.00 of each stock in the inde	gizelle otero	-	12/14/1998
15	I totally agree with you. If you want to give your money away that bad why no	FloydP	-	12/13/1998
14	It might be nice to use the SI portfolio manager to "buy" equal dolla	jjs_ynot	-	12/13/1998
13	Great article on Institutions and the Internuts. They are playing the internut	TWICK	-	12/12/1998
12	Playing the DOT is liking buying options on most internet stocks - the premiums	HiSpeed	-	12/12/1998
11	TWICK, <i> EGGS could easily go back to $6.00 </i> I agree. Watchi	FUZFO	-	12/12/1998
10	thanks very much for the portfolio, look foreward to an interesting thread. tha	james h. snyder	-	12/12/1998
9	As far as OMKT is concerned, we're seeing the increased volume. Dec 11..	TWICK	-	12/12/1998
8	this is very interesting - I'll be doing research this weekend on .DOT loo	J D B	-	12/12/1998
7	Gizelle, Great idea for a thread. Looking forward to keeping up with the DOT h	TradeOfTheDay	-	12/12/1998
6	The DOT - - - "The DOW for the 21st century?" The DOT is equally dol	gizelle otero	-	12/12/1998
5	Just because OMKT is the cheapest stock on the index doesn't mean anything.	TWICK	-	12/12/1998
4	Yes, equally weighted	vc21	-	12/12/1998
3	Does the index give an equal weighting to each of the components ? Thanks for y	getgo234	-	12/12/1998
2	Internet Index Portfolio NOW ON-LINE ! Click this Link !! techstocks.com 5 L	gizelle otero	-	12/11/1998
1	PHLX THESTREET.COM INTERNET IN (.DOT) As of: 12/11/1998 , 4:30pm Last Trade	gizelle otero	-	12/11/1998

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