Call Sellers Caution Against Early Holiday Celebration
With one week to go before the Christmas holiday, the markets seem eager
to erase last week’s dismal performance with a big upside bounce this morning.
Options players are seeing volatility come in with the morning’s rally. Call selling
is the name of the game in the Options world today. Call sellers are out in force in the
tech sector, following in the wake of computer giant MSFT’s earnings warning after
the close last Thursday. Call selling follows suit in the service and the financial
sectors. Moderate volume in order flow may suggest that option’s practitioners remain
skeptical that this rally will be sustained.
While interpreting this market and its gyrations has become increasingly hazardous,
events both political and economic surely figure into today’s move. With the
electoral college officially meeting to cast its votes today, election 2000 can at last be
put to rest. In addition, all eyes are focused on tomorrow’s Federal Reserve meeting,
where market practitioners look for chairman Alan Greenspan to jettison long-standing
inflation-intoxicated talk and to start cutting interest rates next year.
Pre-open order volume was moderate today. In the overall market, call sellers led
buyers 2:1, and put sellers led buyers 3:1. The top five pre-bell order volume leaders
today are as follows: CSCO, MSFT, INTC, ORCL and IBM. CSCO call sellers outpaced buyers
4:1, while put sellers led buyers 3:1. MSFT put sellers topped buyers 2:1, and INTC put
sellers led buyers at the same ratio. ORCL call sellers dominated buyers 2:1. JDSU and AOL
call sellers came out in force, leading buyers 5:1. SUNW call sellers beat out buyers 4:1.
First-order volume remained moderate. In the overall market,
call sellers led buyers 3:1, and put sellers led buyers 3:2. The top five first-hour
order volume leaders today are as follows: ORCL, CSCO, INTC, MSFT and JDSU. NT put
sellers led buyers 3:2. AOL put buyers led sellers 5:2. ORCL call sellers
crushed buyers 10:1. GE call sellers completely dominated buyers. WCOM call
sellers outpaced buyers 8:1. SUNW call sellers were out in force leading sellers
6:1, while put sellers led buyers 3:2.
With the early morning upward move set in the context of such an unpredictable market,
scaling out of your call verticals may be the strategy of choice today
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