Call Sellers Come To Play, But The Market’s Still On Holiday
With
Christmas behind them and merely four trading days remaining in this
most trying year, options players seemed more interested in going to the mall to
look for sales, than showing up for work this morning.
The momentum, if any existed, from Friday’s rally looks like old
wrapping paper. Volatility, having come in a bit the past two days, remains
stable. While volume is decidedly light,
call sellers are making their presence felt, especially in the tech sector.
Muchas
Gracias to Eddie Kwong for his
kind congratulatory words about this column and our “track record†in
pointing out low-risk, high-reward opportunities to our daily readers. (Cf. his
item posted on Friday). Put
in sell orders on your Jan. 65/70 call spreads at 3/4.
I’d rather not
take any kudos for calling these opportunities correctly; I’m not sure if you
executed properly and if you did, whether you are out yet or not. Let us know by
e-mailing me at the site. I will give the lion’s share of praise to our
proprietary spread-search engine. As
Eddie mentioned, the engine scans over a million permutations of different
spread opportunities, and pulls up the best ones for “my viewing pleasure.â€
The good news for you, o’ reader, is that we are making the results available to
you in our daily column. Let the successes of our CSCO and EXTR spreads whet
your appetite for future successes.
Here is how the
data is looking:
Pre-open
order volume was light today. In the overall market, call sellers led buyers
2:1, and put sellers led buyers nearly 3:1. The
top five pre-bell order volume leaders today are as follows: MSFT, CSCO, T, DELL
and LU. MSFT call sellers outpace buyers
5:1, while put sellers lead buyers at 3:2. CSCO
call sellers dominated buyers 5:1. T call
sellers came out in force, dominating buyers 5:1.
ORCL call sellers led buyers 3:1. Dell
Call sellers beat out buyers 4:1. JDSU
call buyers came to the fore, out gunning sellers 4:1.
First-hour
volume remained light. Overall, call sellers led buyers 3:2, and put sellers and
buyers were even at 1:1. The top five
first-hour volume leaders today are as follows: JDSU, MSFT, CSCO, JNPR and AOL. AOL call sellers came
out in force, outdoing buyers 2:1, while
put sellers outgunned buyers at the same ratio. LU
call sellers led buyers 2:1. Dell put sellers beat out buyers 2:1.
I know I went into
to detail about staying in the CISCO spread through Expiry, but today, bid to
ask you can get $2.75 for it. If you got in at 1 1/8, you’ve got 145% in two
trading days. You may want to scale out by placing some limit orders.