Short And Not So Sweet…

  • May 25, 2001
  • Jon Najarian

The U.S. economy grew at a
slower pace in the first quarter and trading is mirroring that slower pace on
the floor today. Even Alan Greenspan’s comments last night about the lingering
weakness in the world’s largest economy couldn’t get the markets excited about
potential future rate cuts. Instead of focusing on those potential interest rate
cuts, traders are taking the Fed Chairman at his word about
“considerable uncertainties," a phrase which Wall Street HATES, since
uncertainty in virtually any form is negative for stock prices.

Short and not so sweet today, as the Dow and Nasdaq limp into the holiday
weekend. Our scans are following three stocks today, none of which was
compelling enough to really get our juices flowing, but could foretell some
future action after the Memorial Day holiday.

  1. In
    Telephone
    (
    T |
    Quote |
    Chart |
    News |
    PowerRating)    , 28,250 July 40 puts have
    traded. Two 10,000 lots have traded for $19.10 with T trading $20.87, which
    means they virtually traded for parity with the underlying.

  2. 35,000
    Microsoft
    (
    MSFT |
    Quote |
    Chart |
    News |
    PowerRating)     January 75 puts
    traded for an average price of $10.60. With no corresponding calls changing
    hands, this is someone interested in protection in a big way, way out
    ‘till January 2002.

  3. IBM
    has seen some rather robust call action. Maybe the light selloff has a
    bigger player wondering if Big Blue may trade higher next week.

Symbol

 Call

Volume

 Put

Volume

 $W

Call Vol

 $W

Put Vol
MSFT

 47,462

 44,602

 98,942

 400,483
T

 10,226

 31,085

 3,362

 560,478
IBM

 9,143

 3,024

 108,943

 9,234

(1010WallStreet.com has licensed
the use of Hamzei Analytics proprietary options analytics)