Market Surge Secures Welcome Spike In Order Flow

• March 6, 2001
• Tony Saliba

The
early morning options market is feeling the reverberations of a
significant surge in the stock market. Order flow has picked up its pace
considerably, registering a whopping 2.8 on our scale of 1.0 to 10.0, thankful
news to traders and brokers alike. 

Options
practitioners remain wary, apparently, and are electing to continue their habit
of collecting premium in the early morning hours.
Call sellers are still king of the hill, leading buyers 4:1. Put sellers
are loudly staking a claim as well, topping buyers 3:2. 
The tech sector is quite alive, (if not yet “kicking”), with the
typical titans leading in terms of order flow.
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CSCO |
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INTC |
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ORCL |
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rank first, second and third, respectively). 
Our search engines are showing some heavy early morning activity in
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IBM |
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and
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GLW |
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And how are our
suggested Softie spreads doing?. For the more risk-averse trader, we have
focused on the
(
MSFT |
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PowerRating) April 60/65 call vertical spread, and we got in at $1
13/16.. today it is actually offered at  $1
7/16, slightly below where we got in at.  For
the more daring investors, we found the MSFT April 55/65 call spread.
This spread was in-the-money when we got in and could be bought at $4
11/16. Today, the spread is offered at $5
7/16, up a little less than a buck. Note
that any profits depend of course upon your commissions and exit point.

Pre-open
order volume was moderate this morning. Overall, call sellers led buyers 3:2
while put sellers beat out buyers at 3:2. In pre-bell activity,
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JNPR |
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sellers outnumber buyers 5:1, while put sellers trounce buyers 4:1.
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SUNW |
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call sellers led buyers 2:1. 
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NOK |
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call buyers showed up leading sellers 4:1. 

(
EMC |
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call buyers dominated sellers 4:1.
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JDSU |
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call sellers led buyers 7:2.

First
order volume was heavy this morning. Overall, call sellers led buyers 4:1 while
put sellers beat out buyers at 3:2.  In first hour activity,
(
CSCO |
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call sellers outnumber buyers 5:1, while put sellers trounce buyers 3:2.

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DELL |
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call sellers led buyers 4:1.
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AMAT |
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call sellers showed up leading buyers 9:1.

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AOL |
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call sellers showed up leading buyers 19:1. IBM call sellers led buyers 2:1.

A
lot of people have been writing in about my upcoming
seminar in Chicago, asking what it’s going to cover. The seminar is focused
on the trading goals of the advanced retail options trader. 
I will zero in like a laser on the trading strategies, repair strategies
and money management techniques that you need to know cold
in order to make money (and not lose money) in these trying times.

Along
with my two top traders, we will quickly
review the basics and then forge ahead into detailed explanations of “the
Greeks” and how they are used to manage risk; basic and sophisticated
spreading strategies, including both directional and volatility plays;
synthetics; volatility; and technical analysis for the retail trader, (just to
name a few!).

Extensive
question and answer sessions will follow. In
short, I will be trying my best to help the attendee learn what he or she wants
and needs to know.

In addition, a major brokerage firm will
be running a promotional special that will surprise you all… I’ll have details
in next Monday’s column….

Please
keep on writing, and I promise to answer:
tonys@tradingmarkets.com