Call Buyers Wade Into Chilly New Year’s Waters
The “new” year started out looking an awful lot like 2000, with a precipitous
slide in most names yesterday. Options traders, who have elected to stay largely on the
sidelines over the past week or so, seem to be getting back into the game today. In the
early morning activity, we are seeing the volume pick up significantly from yesterday, our
overall indicator is at 24 (on a scale of 1 to 100, 11 being the slowest day
we’ve seen, 30 being our 30-period moving average and 47 being a high water of
activity). Note that this scale concentrates on first-hour activity only…Â
Call buyers
seem to be rearing their heads; perhaps a sign that traders feel this market is close to a
bottom, or least some short-covering. Volatility is up modestly on moderate-to-slightly-heavy volume, another sign that traders are ready to commit themselves.
Pre-open order volume was moderate today. In the overall market, call sellers and
buyers are even at 1:1, while put sellers nudge buyers 3:2. No big surprises in the top
five order volume leaders today:
(
CSCO |
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PowerRating),
(
INTC |
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PowerRating),
(
JNPR |
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PowerRating),
(
GE |
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PowerRating), and
(
ORCL |
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PowerRating). CSCO order flow was high,
and call buyers outnumber sellers 3:1, while put sellers outpace buyers 5:4. INTC call
sellers led buyers 3:2, and put sellers outpaced buyers at the same ratio. ORCL pre-bell
call sellers were out in force leading buyers 3:1.
(
QCOM |
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PowerRating) call buyers made their presence
felt as well, leading sellers 3:2. JNPR call buyers outnumbered sellers 3:2.
After the first hour of trading, call buyers led sellers overall at 5:4, while
put sellers led buyers at the same ratio. The top five first-hour order volume leaders
were: CSCO, JNPR, INTC,
(
WCOM |
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PowerRating) and
(
EMC |
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PowerRating). JNPR call buyers outnumber sellers 3:2, while put
buyers outnumber sellers at 3:2 as well. INTC call sellers led buyers 3:2, and put sellers
outpaced buyers at the same ratio. WCOM call sellers were out leading buyers 3:2, and put
sellers matched at the same ratio. QCOM call buyers made their presence felt as well,
leading sellers 3:2.
(
CIEN |
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PowerRating) call buyers outnumbered sellers 3:2.
The
(
EXTR |
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PowerRating) vertical is hanging in at ¾ to $1 and the CSCO vertical is $1 to 1 ½.
These examples of my “plays” two weeks ago are holding up in the gloom that we
are experiencing. If you exited when they were a double, they look good again. If you are
sticking with it until expiration with me, look away, you’ve got plenty of time. If
you’re dying to trade, just dying to make a trade, let me know at
have written to me since we established the mailbox and I have written back to all (save
one gentleman that has a laundry list of ills he needs doctoring, and I promised him
we’d dig in this week to operate).