Call Buyers Shake Off Sleep In Tech Sector
The trading week opened in habitual fashion for options players in ‘01 this Monday
morning, with low order flow and a predominance of call sellers. In the tech sector today,
however, call buyers have made their presence felt as well. In certain names, such as
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CSCO |
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PowerRating),
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AOL |
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PowerRating),
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SUNW |
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PowerRating) and
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DELL |
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PowerRating), call buying is particularly strong out of the gates. All three
names are lower at this point, but short covering or new buying here points to unusual
interest, and you may want to tailor spread strategies to look to the upside.
Volatility remains lower than we have seen for quite a while, commensurate with lighter
volume. Order flow remains sluggish registering a 2.3 on a scale of 1 to 10.
Here are today’s numbers…
Pre-open order volume was light this morning. Overall, call sellers led buyers 3:2,
while put buyers beat out sellers at 5:4. In pre-bell activity,
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MSFT |
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News |
PowerRating) call sellers
outnumber buyers 7:4, while put buyers trounce sellers 6:1. ORCL call sellers led buyers
6:1. AOL call buyers showed up leading sellers 5:1.
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IBM |
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PowerRating) call sellers crushed buyers 4:1.
SUNW call sellers beat up buyers 3:1.
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CHKP |
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PowerRating) call buyers dominated sellers 5:1.
First-hour order volume was light to moderate this morning. Overall, call buyers led
sellers 5:4, while put sellers and buyers were even at 1:1. In pre-bell activity,
MSFT call sellers outnumber buyers 2:1, while put buyers trounce sellers 2:1.
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WCOM |
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PowerRating) call
sellers outnumber buyers 4:1, while put buyers trounce sellers 3:1.
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BRCM |
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PowerRating) call buyers
showed up leading sellers 2:1.
(
SEBL |
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PowerRating) call buyers crushed sellers 2:1. PPRO call buyers beat
up sellers 2:1. CHKP call buyers dominated sellers 3:2.
I’ll be out of the office for the next week-and-a half, away from the
trading desk. After a week of sun and surf I will be speaking at an assembly of bankers
and brokers in Panama City, Panama, that want to begin to use options (more liquidity for
us all). I will be monitoring the two open spreads we have to discuss if need be.
We are getting beat up in these two bullish positions, but both stocks have turned
their heads by more than double the cost of these verticals… something that I
don’t like, but something I can live with vis-à -vis having taken a position in the
common. With the little bit that I suspect you all would be committing to such ideas, the
diversification and scaling aspects will save you any real problems (too costly).
Lastly, I will finish getting to the mail that you sent by the end of this week. It has
become a lot more than we initially expected, but it’s a good thing… a lot of
your questions are similar, having to do with the same concerns and problems with our end
of the business. Once I have caught up on all of the current mail, we will catalog the
Q&A and make it available to this site.
We have taken a major step closer to being able to bring you the SpreadSite
capabilities that a lot of you have asked about in your mails. This will add tremendous
liquidity to this exciting area. www.tonys@tradingmarkets.com