Lucent Drags Down NYSE Spirits
I was out
in New York
for the past two days and if you wanted to see some hurting cowboys, you
needn’t look very far anywhere around the stock exchange. I was on the
NYSE floor when the syndicate broke for Agere
Systems (AGRa) and the you-know-what hit the fan. The subsequent
rumors of a Lucent
(
LU |
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Chart |
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PowerRating) bankruptcy
filing caused any bid to be pulled and we all know what the results were.
Today, that same information on LU and AGRa nearly sent us into trading
curbs, before LU denied the BK rumors and the bounce began.
If you want to hear my thoughts, as well as those of fellow www.TradingMarkets.com
commentator Goran Yordanoff, tune into www.WebFN.com
at a special time, tonight at 5:00 p.m. CST instead of our usual Thursday 5:00
p.m. slot. As always, it should be the most lively half-hour on television or
the web!
Over the past few hours there have been some pretty aggressive call option
accumulations in ITWO. Our systems tracked a 2000-lot buyer stepping up to
the plate to buy 2000 April 15 calls for 1 1/4 when I2
Technologies
(
ITWO |
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PowerRating) was trading for 13 3/4 at 9:25 am CST. That
bet has already borne fruit, as the April 15s are now trading double that,
with the bid 2 1/4 and the offer 2 1/2. Someone had some pretty nice
timing!
You technicians out there will be better judges than I as to whether this is
a rounding bottom, but someone positioned for a rebound and got what they
wanted in a hurry. A relatively conservative bet on a continuation of this
move would be to buy the ITWO AUG 15s for 4 3/4 and sell the AUG 22 1/2 calls
for 2 1/8. Your total invested is just 2 5/8, or $2625 on a ten-lot trade
and it’s intrinsically worth 5/8 today with ITWO trading for 15 5/8.
Another great turnaround story is Rational Software
(RATL), which cratered down to 12 1/2 this morning, but has
bounced on heavy volume (11.3 million by noon). Right now (12:00 CST) RATL
is back trading 15 1/2, a 24% rally from the bottom.
Some traders may buy the RATL July 15s for 4 1/4 and sell the July 22 1/2s for 2, or
a net out of pocket of just 2 1/4. I know these are both bullish plays, but
given the option volume in ITWO and the stock turnaround and volume in RATL,
the bet seems like a reasonable one.
Extreme Put Volumes:
| Symbol color:black”>
|
Call
Volume PutVolume $WCall Vol $WPut Vol | AMAT color:black”>
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7,5266,53129,90833,243 | CIEN color:black”>
|
15,68717,89238,239123,873 | CSCO color:black”>
|
51,19340,21268,050300,919 | INTC color:black”>
|
32,66450,75254,824163,842 | QCOM color:black”>
|
9,62415,94935,532180,447 | XLNX color:black”>
|
2,0519,4956,97374,267(1010WallStreet.com has licensed the use of Hamzei Analytics proprietary options analytics) Talk |