Rate Cut Fails To Jump-Start Options Paper Flow
The Fed meeting yesterday produced the expected and hoped-for 50 basis point rate cut,
but failed to significantly stoke up the fires in the options market. Paper remained
moderate to light this Thursday morning, and the habitual pattern of early dominance in
call selling remained in place. Put sellers are also rattling their sabers, as traders
elect to collect premium out of the blocks. Tech activity is heavy as usual, and in this
sector call buying has increased slightly in proportion to call selling. Order volume
began with a modest pre-bell level and remains moderate after the first hour of trading.
(Registering an X on our scale of Y-Z).
Let’s look at the tale the numbers tell….
 Pre-open order volume was light today. In the overall
market, call sellers led buyers at 2:1, and put sellers also led buyers at 2:1. The
top five order volume leaders today had some newcomers:
(
JNPR |
Quote |
Chart |
News |
PowerRating),
(
AOL |
Quote |
Chart |
News |
PowerRating),
(
INTC |
Quote |
Chart |
News |
PowerRating),
(
JDSU |
Quote |
Chart |
News |
PowerRating) and
(
NTAP |
Quote |
Chart |
News |
PowerRating).
 In NTAP, pre-bell call buyers were out in force, leading sellers 7:1, while put
sellers squashed buyers 5:1. JNPR call buyers made their presence felt as well, leading
sellers 6:1, while put sellers led buyers 5:1. INTC call sellers outnumbered buyers 4:1.
AOL call sellers were out big-time, pounding buyers 3:1. AMCC call sellers outgunned
buyers 2:1.
First hour order volume remained light today. In the overall market, call sellers led
buyers at 3:2, and put sellers led buyers at 3:2. In NTAP, first hour call buyers lea
sellers 2:1, while put sellers squashed buyers 6:1.Â
(
BRCM |
Quote |
Chart |
News |
PowerRating) and
(
SCMR |
Quote |
Chart |
News |
PowerRating) call buyers made
their presence felt as well, leading respective sellers 2:1. INTC call sellers
outnumbered buyers 4:1.  JNPR, INTC and
(
SUNW |
Quote |
Chart |
News |
PowerRating) call sellers were out leading
buyers 2:1.Â
(
AMCC |
Quote |
Chart |
News |
PowerRating) call sellers outgunned buyers 2:1. IBM call sellers outgunned
buyers 4:1. while put buyers squashed sellers 5:1.
Yesterday we made
some recommendations based on a number of factors, including risk/reward, liquidity and
others… the stocks are either at or slightly lower than their values yesterday. Those
who haven’t yet done so — and wish to -— may still get in. We’re looking for a 10%
move in the underlying stocks in the next two weeks and at least a double on these
spreads.
We’ll be tracking these spreads closely and looking
for other opportunities with our search engine, and of course will pass on the
details to you. Many of you wrote and complained about visual problems with the graphics.
I apologize for the technical difficulties, and our staff is working them out