Option Investor

Daily Newsletter, Sunday, 03/21/1999

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The Option Investor Newsletter            Sunday  3-21-99  1 of 6
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.

Posted online for subscribers at http://www.OptionInvestor.com

Published three times weekly, Sunday, Tuesday, Thursday evenings.
New plays and market wrap updated daily on the website. 
Entire newsletter best viewed in COURIER 10 font for alignment
        WE 3-19          WE 3-12           WE 3-5          WE 2-26
DOW     9903.55 + 27.20  9876.35 +140.27  9736.08 +429.50 - 33.37  
Nasdaq  2421.27 + 39.74  2381.53 + 44.42  2337.11 + 49.08 +  4.43  
S&P-100  650.11 +  1.84   648.27 +  9.28   638.99 + 20.57 -  1.85  
S&P-500 1299.29 +  4.70  1294.59 + 19.12  1275.47 + 37.14 -   .86  
RUT      396.58 -  1.80   398.38 +   .37   398.01 +  5.75 -   .04 
TRAN    3338.48 + 70.97  3267.51 - 45.28  3312.79 +105.36 + 72.92  
VIX       25.84            25.81            25.12           29.52
Put/Call    .53              .60              .61             .67

Three strikes, are we out?

Everybody cheered as the Dow passed 10K for the third time but
even though the Dow rose as high as 10085 the was no joy in 
Wallville Friday night. The fall from greatness was quick, with
the Dow finishing at the low of the day, 182 points off the high.
Not a pretty picture! The bloom came off the rose as worries about
earnings wilted expectations across the tech sector.

The concern over IBM earnings that we talked about Thursday came
to a head Friday as Morgan Stanley cut estimates and expressed
doubt over this quarters numbers. Merrill Lynch at the same time
expressed confidence over the revenues from the software and
services side more than offsetting shrinking revenues from the
mainframe side. The two analysts actually got into a verbal duel,
trading point for point as the day wore on. In the end investors
took the cautious route and fled the scene. IBM lost -$9.12 and
was the leader in deflating the Dow 10K euphoria. After the close
several other analysts also expressed concern over IBM and the
tech sector as a whole. We expect more downgrades on IBM and
possibly other techs as well on Monday. Compaq is now the focus
point as rumors are mounting that they will miss estimates by a

To further compound the picture, Dell Computer, who has
repeatedly said they would not enter the low margin world of the
sub $1,000 PC, has now reneged. Citing increased retail sales
volume of sub $1,000 computers and dropping market share because
of this shift, they are now going to have offerings in this range.
To bolster their renege, they claimed that lower component costs
will allow them to compete at margins higher than possible in the
past in this cheap market. Analysts did not buy it. Dell has always
enjoyed high margins and the luxury of the premium brand name. 
Now that they have shown weakness by agreeing to come out and
fight in the mud, the perception is that they are losing volume 
on the high ground. They can't make 35% on $800 PC gear and if
this is going to be an attempt to make up for lost high end 
volume then their overall margins will suffer. Lower margins will
be immediately met by a lower PE and stock price. Dell Computer
for less than $40? Bet on it! This development has now started
new rumors of a possible Dell earnings warning. Heresy? Imagine
the carnage in the tech sector if this icon falls.

Techs were not the only sector down Friday. Banks also took a
hit after First Union (FTU) warned they would miss estimates by
three cents. Profit taking after the recent run up in the financials
was widespread. Drugs and airlines suffered as well. Any sector
with recent gains was in danger. Many suffered key reversals at
key benchmarks. (see the market sentiment section)

Positive news was the influx of new cash into stock funds. In the
last two weeks over $16 billion flowed into funds. More than Jan
and Feb combined. This cash did not make it into the market. The
advance/decline line is still falling sharply. Decliners out 
numbered advancers 4,193 to 2,770 (-1,423). The Russell-2000
again bounced off resistance at 400 to drop -3 points. 

Because of the cash on the sidelines we do not expect the market
drop very far before being met by bargain hunters. "Very far" is
of course in the eyes of the beholder. The Dow held 9900 at the
close but possibly only because the clock ran out. We are still
trading +500 points above our recent trading range ceiling of
9400. Our guess of a bottom is somewhere in the middle. Possibly
9700? I have been preaching to the choir for two weeks that some
profit taking was due and an earnings warning by a big name could
be the catalyst. I view this as an opportunity. Those of us in
cash that have been waiting for an entry point for what seemed
like an eternity (a week) will get to buy at a discount what
everybody else bought last week at retail. I just hope we see
a real sell off, real quick, that clearly says "buy me". A series
of short drops punctuated by fake intraday rallies is of course 
the worst scenario. You are then faced with the "is it real or.."
dilemma. There is no magic answer. Strong volume, positive advances,
strong buying of specific stocks at a specific price points, are
all keys but each one by itself is not enough. This is the time
to pick two or three stocks, get to know their intraday charts
well and be ready to strike when they turn back up. 

If you are holding open positions then tighten your stops and 
protect your profits. Move back to cash and wait. No one can
forecast the week. We just have to play the cards the market
deals us. In poker if you have a bad hand you fold. It is
foolish to keep betting and taking more cards trying to improve
it. Save your money and nerves, wait for the market.

Good Luck, sell too soon.

Jim Brown

About two months ago I offered 10 annual subscriptions for ten
traders that would use my cash flow method of trading faithfully
for at least ten trades and send us the results. We have had 
many traders send us trades over the past few weeks. We are 
ready to wrap this up and report the results. Please summarize
all your trades in this period (at least 10) and send them to
trades@OptionInvestor.com so we can tally the winners. The
winners must be able to document them with trade confirmations
in order to qualify. You will be notified if you are in the 
top 10. We will publish the results in the next week or two.
The concept of this exercise was to demonstrate the effectiveness
of not going for the home run every time but simply taking 10-25%
profit in every trade and repeating it over and over every week.


Nobody ever made a bid for GADZ. It will probably happen
any time now that I am out but stale money is wasted money.

I never got an entry point on anything I tried to buy
last week. As a student of the market I was concerned that
the D10K frenzy would burn out as soon as the milestone
was passed or an earnings warning punctured the balloon.
Right on both counts I guess.

I did buy some OEX puts on Friday as the market started 
to sell off. I am excited about the sell off since it
means the start of a new cycle. I am in cash and ready
to rock if I see a rebound in the market. I would like
to see it form a new bottom quickly so we can determine
a new trading range.


Sold GADZ MAR-7.50 calls EQK-CU @ .44 cost $1.00 Loss = $ .66





One of the common ingredients to becoming a successful options trader
is proper Money Management. The hardest element in option trading is
taking a loss and taking a profit. I have some basic rules that I use
when trading options.

The first (and hardest) is realizing that you are in a bad position,
and taking a loss. It has been my experience, that if an option losses
half of its' value, it will more than likely lose all of its' value.
Therefore, the first rule of thumb to use in option trading is risk
about  of the premium. If an option expires worthless, you lose
everything. It is better to salvage what you can and live to fight
another day.

The second step to proper Money Management is determining when to get
out with a profit. If the Market moves in your favor, I like to take
profits on  of my position if it doubles in value. These steps will
force you to take a profit and more importantly, if the market turns
around you will not have as many options working against you. For
example, when MSFT was making its run from 160 to 175 we were taking
profits on half of our position around 172 (After our options had
doubled). I never attempt to pick the top of a move; I am much more
concerned about taking a loss. If you control the losses, the winners
will come.

Another main objective of proper money management is asset allocation.
I never invest more than 20% of my available capital into one single
play. (No matter how good it looks). If that play does not work out, I
will be forced to start from scratch and build my capital back up just
to be able to speculate on another option play. Many of my clients feel
as if they always have to be invested in one play or another. Cash and
patients are two very good things to have. The markets have been here
for many years; they are not going anywhere. Wait for the market to
tell you when to get in.

Always have an idea where to get in and where you will be willing to
take profits or a loss; then stick to your plan. You should always use
a stop-loss and profit orders when trading options. A full-service
broker will be able to take a stop-loss order as well as a profit order
when you initially enter the market. They should be able to cancel the
other order if one is filled. Most people can not afford to be
full-time option traders. Use these orders to take the place of you
worrying about where the market is trading. The past few weeks have
been very difficult to trade. Those people who had taken the time to
formulate a plan, and stuck to it, did not panic and make a rash and
usually wrong decisions. Trading is not easy. Use these basic tools to
help you avoid the 'expensive lessons' that I have heard about.

Andrew Aronson
(888) 281-9569
LaSalle St. Securities

Market Sentiment - By Pinnacle Capital Advisors
Sunday, March 21, 1999

Powerful Reversal Signal?

For investors seeking examples of powerful reversal signals, the 
stock market provided several classic examples on Friday, March 

At OI's recent seminar, Pinnacle Capital Advisors highlight three 
(3) of the most powerful Candlestick reversal signals -- Shooting
Star, Tweezer Top, and Evening Star. These signals reveal 1, 2
and 3-day reversal patterns, respectively.  The Tweezer Top, a
2-day reversal, is signaled after a long up (green) day is
followed by a long down (red) day of trading.  If you recall,
the market advanced more than 100 points on Thursday (3/18),
then sold-off precipitously the next day, Friday (3/19).  These
candlestick patterns are important to short-term traders because
it signals that a key battle has been fought between bulls and
bears.  What's more, these signals only occur a couple of times
over the near-term.  So when they appear, savvy option traders
can get a jump on other investors. They also become more
meaningful at key benchmarks or turning points in the market. 
On Friday (3/19), the market sustained more damage than CNBC
would have you believe -- blaming the down draft on IBM.  Look 

at how many indices flashed the Tweezer Top.  Although the market
may ultimately advance higher, these powerful reversal signals
should not be ignored over the near-term. 

Sector              Index    Reversal Signal        

INDU                INDU     Tweezer Top    
S&P 100             OEX      Tweezer Top
S&P 500             SPX      Tweezer Top
Nasdaq              NDX      Tweezer Top

Software            CWX      Tweezer Top

Banking             BIX      Tweezer Top
Brokers             XBD      Tweezer Top

Airlines            XAL      Tweezer Top
Oil& Gas            OIX      Tweezer Top

For more about candlestick charting, subscribers can order an 
excellent book on the subject from OI's bookstore entitled -
Beyond Candlestick by Steve Nisson.

OTM Call Analysis

Last week, Pinnacle began tracking the open interest at OTM 
call option (650-700). As documented all last week, out-of-the
money (OTM) call buying reached extreme levels and contributed,
in part, to the precipitous sell-off on Friday (3/19).  

We thought it might prove useful to track separately the call
buying activity as we move into April's expiration cycle.  If we
see an unusual level of  optimism, OI subscribers will be the
first to catch the activity.

OEX OTM Call Analysis (Open Interest MAR 650-700)
Date                 Open Interest     Change %    Alert
Friday, March 5             58,085         -
Thursday, March 11          65,569      +12.9%
Friday, March 12            68,675      +18.2%
Tuesday, March 16           79,480      +37.8%      
Thursday, March 18          85,124      +47.6%     *    

OEX OTM Call Analysis (Open Interest Apr 650-700)
Date                 Open Interest     Change %    Alert
Friday, March 19            35,626         -

Peak Open Interest 

Another sentiment indicator Pinnacle likes is the Peak Open 
Interest.  Peak Open Interest compares front-month OEX call and
put options at the strikes with the highest open interest.  The
ratio is calculated from the highest PUT and CALL open interest
figures occurring at any time for any strike throughout the
expiration cycle.  If you pulled up the April options montage
for the OEX, you will discover that the largest open interest
for April calls and puts options sit at the OEX 700 and 630
strike price, respectively.  

As shown below, those times when peak PUT open interest exceeds
CALL open interest is generally considered BULLISH for the
broader market.  Conversely, periods when peak CALL open
interest exceeds peak PUT open interest, tend to occur during
market weakness. 

Although it's early in the April expiration cycle, take a look at
the peak open interest.  Open interest at the 700 strike, nearly
7% from where the OEX is currently trading has nearly twice the
open interest than the 630 strike.   

Peak Open Interest (OEX)
Strike/Contracts     (3/19)       
Puts                 630 / 5,622
Calls                700 / 8,916
Put/Call Ratio       .63

Simply stated: many option speculators are betting that the 
broader market will climb higher. This is also confirmed by the
latest Investor's Intelligence survey (3/17) which reported the
LOWEST percentage of newsletter's Bearish of 17.6%.

Investors Intelligence Survey
                    Major               Percent     Percent
Date                Turning Point       Bullish     Bearish
October 97          Bottom              22.0        48.3       
July 20, 1998       Top                 52.0        24.0  *        
October 8, 1998     Bottom              38.5        42.7
January 11, 1999    Top                 58.3        30.0
March 4, 1999       Near-Term Bottom    49.1        32.5 

March 19, 1999      Top ???             52.6        17.6  *   


Putting It All Together

Together, these technical and sentiment Bearish indicators 
may preempt the D10K celebration for the near-term.  As such, we 
want to encourage investors to develop a balanced attack.

Don't get caught up in all the D10K hype.  Pinnacle is focused on 
the following indicators for early clues as to the market's near-term


Top Reversal              Several industry sectors revealing 
                          Tweezer top candlestick formation.

Peak Open Interest        April peak open interest - .63

Interest Rates            Bouncing off 200dma and holding above
                          important 5.50% level

Russell 2000              Breaking below key 400 level.  Generals  
                          leading but troops are not following.

Advance/Decline Line      Deterioriating A/D line. 


Market Volatility (VIX)   Trading below 50-day moving average


Market Sentiment at a Glance
                                Friday     Tues      Thurs  
Indicator                       (3/19)     (3/23)    (3/25)  Alert

Pinnacle Index (OEX):          
Overhead Resistance (650-665)     1.7          
Underlying Support  (625-640)     1.0

Put/Call Ratios:
CBOE Total P/C Ratio               .6
CBOE Equity P/C Ratio              .4                          *   
OEX P/C Ratio                     1.3                          *                

Peak Open Interest (OEX):
Puts                              630
Calls                             700
P/C Ratio                        .96

Market Volatility Index (VIX):	
CBOE VIX                        25.95                          *

Investors Intelligence:
Bullish                         52.6%   *  
Bearish                         17.6%   *

The Power of Sentiment Analysis

It has often been said that the crowd is right during the
market trends but wrong at both ends.  Measuring and
evaluating the sentiment of the crowd, therefore, can give
savvy option traders a decided edge.

Pinnacle Index
OEX                             Friday       Tues       Thurs
Benchmark                       (3/19)      (3/23)     (3/25)
                    (660-665)      5.4
                    (650-655)       .9
Overhead Resistance (650-665)      1.7

OEX Close                       650.11

Underlying Support  (625-640)      1.0
                    (635-640)       .9
                    (625-630)      1.0

Average ratings: 
Resistance levels 2.0 / Support .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is building at the OEX 650/665
level while the underlying support is weak at the
OEX 625/640 level.

Put/Call Ratio 
                                Friday      Tues       Thurs
Strike/Contracts                 (3/19)     (3/23)     (3/25)
CBOE Total P/C Ratio               .62
CBOE Equity P/C Ratio              .43
OEX P/C Ratio                     1.31

Peak Open Interest (OEX)
                     Friday         Tues           Thurs
Strike/Contracts     (3/19)         (3/23)         (3/25)
Puts                 630 / 5,622
Calls                700 / 8,916
Put/Call Ratio       .63



Market Volatility Index (VIX)
Date                Turning Point       VIX
October 97          Bottom              54.60      
July 20, 1998       Top                 16.88         
October 8, 1998     Bottom              60.63
January 11, 1998    Top                 26.38
March 4, 1999       Bottom              28.15   

March 19, 1999                          25.84   *



Investors Intelligence Survey
                    Major             Percent     Percent
Date                Turning Point     Bullish     Bearish
October 97          Bottom            22.0        48.3       
July 20, 1998       Top               52.0        24.0         
October 8, 1998     Bottom            38.5        42.7
January 11, 1999    Top               58.3        30.0

January   6, 1999                     58.3        30.0   
January  13, 1999                     60.0        30.0   
January  20, 1999                     61.7        25.9   
January  27, 1999                     60.7        28.2   

February  3, 1999                     60.0        26.7   
February 10, 1999                     61.7        25.9   
February 17, 1999                     55.7        28.7   
February 24, 1999                     54.1        31.5   

March 3, 1999                         50.9        32.1   
March 10, 1999                        49.1        32.5   
March 17, 1999                        52.6        17.6  *   

Market Posture
As of Market Close - Friday, March 19, 1999 

                   Key Benchmarks
Broad Market       Bearish/Bullish  Last    Posture/Since  Alert

DOW Industrials    9,500  10,000   9,904    Neutral   3.19  *              
SPX S&P 500        1,250   1,325   1,299    Neutral   3.19  *    
OEX S&P 100          640     660     650    Neutral   3.19  *    
RUT Russell 2000     400     435     397    BEARISH   3.12     

NDX NASD 100       2,000   2,100   2,054    Neutral   3.19  *     
MSH High Tech        900   1,000     984    Neutral   3.19  *           

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
XCI Hardware         850     900     859    Neutral   3.5              
CWX Software         600     650     627    Neutral   3.5                
SOX Semiconductor    350     420     375    Neutral   3.5        
NWX Networking       420     450     435    Neutral   3.4              
INX Internet         500     570     566    Neutral   2.19       

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
BIX Banking          675     710     696    Neutral   3.19  *                    
XBD Brokerage        700     825     805    Neutral   3.19  *        
IUX Insurance        630     655     641    Neutral   3.19  *              

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
RLX Retail           900     940     917    Neutral   3.19  *      
DRG Drug             800     835     812    Neutral   3.19  *       
HCX Healthcare       775     835     815    Neutral   3.19  *                
XAL Airline          340     365     354    Neutral   3.19  *   
OIX Oil & Gas        245     260     256    Neutral   3.19  *                      

Posture Alert

After failing to hold above D10K milestone, we have turned 
Neutral across the Dow Jones Industrial Average and several
other broad market indices and industry sectors.  We want
to caution investors that several industry sectors
revealed a Tweezer Top, one of the most powerful technical
top reversal patterns. 

A detailed description of our Market Posture and its
applications can be found at:


Coming Events

None scheduled


API Oil Stocks    3/20     Forecast:  --     Previous: 4.73M 


Durable Goods      Feb     Forecast: -1.1%   Previous: 3.6% 
Orders             Feb     Forecast:  --     Previous: 3.3%
Ex-defense         Feb     Forecast:  --     Previous: 0.4%


Jobless Claims    3/20     Forecast:  --     Previous: 298k 
Existing HomeSales Feb     Forecast:  5.0M   Previous: 5.07M
Help Wanted        Feb     Forecast:  --     Previous:   93
Univ of MI         Mar     Forecast:  106.2  Previous: 108.1
Money Supply(M2)  3/15     Forecast:  --     Previous: -$14.5B


None Scheduled

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This newsletter is a publication dedicated to the education 
of options traders. The newsletter is an information service 
only. The information provided herein is not to be construed 
as an offer to buy or sell securities of any kind. The 
newsletter picks are not to be considered a recommendation 
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in 
options. It is possible at this or some subsequent date, the 
editor and staff of The Option Investor Newsletter may own, 
buy or sell securities presented. All investors should consult 
a qualified professional before trading in any security. The 
information provided has been obtained from sources deemed 
reliable but is not guaranteed as to accuracy or completeness.
The newsletter staff makes every effort to provide timely 
information to its subscribers but cannot guarantee specific 
delivery times due to factors beyond our control.

The Option Investor Newsletter              3-21-99
Sunday                   2  of  6

Last weeks change for this weeks picks:
Index      Last  Week
Dow      9903.55 27.20
Nasdaq   2421.27 39.74
$OEX      650.11  1.82
$SPX     1299.29  4.68
$RUT      396.58 -1.80
$TRAN    3338.48 70.97
$VIX       25.84  0.03

Stock     Price  Week

RNWK      141.75 46.63 Possible takeover, and split candidate
AOL       119.25 23.14 Gaining weight in the S&P 500
MSFT      171.19 11.00 Splits Friday March 26th
IMNX      178.38 10.13 Splits 2:1 on March 25th
RFMD       95.13  9.82 Big mover, possible upward confirmation.
QCOM       84.56  7.31 Setting new highs!
EMC       118.25  6.01 Possible entry point, great to target shoot
SCH        89.63  5.63 Setting new highs! And nearing split levels
WCOM       91.50  5.56 We got our dip...wait for entry point
BVSN       66.00  5.00 Internet play that is not too expensive
GE        112.00  4.62 Up on a down day. But Dow reactive
OMC        73.94  4.32 Strong and climbing
MER        90.75  3.49 Another takeover candidate
INSS       66.75  3.25 Splits 3:2 on April 5th
JPM       123.13  2.12 Profit taking was necessary, takeover cand.
TLAB       92.13  1.43 Split Candidate
MWD       101.63  0.51 Split Candidate
AHP        65.81  0.44 Looking for a bounce back
PFE       140.75  0.38 Vote to approve 3:1 split April 22nd.
FSR        92.63  0.37 Splits 3:1 in April.
G          62.00  0.00 Showing strength in down market
KMB        49.94 -0.50 Dropped, not moving fast enough
LOW        63.75 -1.12 Consolidation over, but watch market
BA         34.00 -1.14 Dropped, Rumor denied
WMT        94.75 -1.53 Big dip Friday, possible entry point
C          64.25 -1.69 Market reaction, wait for bottom
KSS        73.50 -1.88 Dropped, not moving fast enough
DELL       40.25 -1.94 Dropped, Sector is weak
LGTO       53.13 -3.51 Dropped, possible breakdown
PVN       107.75 -6.69 Dropped, needs to rest

NEON       59.00 -11.63New put, Dropping fast, more rumors
IBM       168.56 -9.44 New put, Negative whispers for Q1
CGX        47.50 -6.00 New put, out of favor with investors
GIS        74.00 -4.56 New put, shrinking margins hurt profits
SBUX       56.06 -4.00 New put, play the post split depression
BMCS       34.00 -2.31 Still falling
CPQ        30.75  0.50 Sector is getting worse
LHSG       37.63  0.51 Wait for confirmation
LXK        88.50  2.12 New put, poor PC sales is bad business
NAV        40.38  2.25 Dropped, found a bottom
NSOL      288.00 66.00 New put, High risk, post split fall out


SL  = Suggested stop loss. Sell if bid breaks this price.
OI  = Open Interest - the number of open contracts outstanding.
TP/P= True premium or Time premium
RRR = Risk/Reward/Ratio
ITM = In the money
ATM = At the money
OTM = Out of the money
MTD = Move to double - amount stock must move to double option price
                       in one week. ONE WEEK MOVE ONLY !

Numbers within ( ) are the amount of change for the week.
Numbers within ( ) may be designated with PxW, like P3W, prior 3 weeks

The options with a "*" by the strike price are our choices from the 
group. If the stock moves as expected we feel they have the best 
chance to substantially increase or double in price with the best
risk/reward ratio compared to the other options for the same stock.
You must determine if they fit your risk profile for time and price.

Analysts ratings: 1-2-3-4-5 
Analysts who follow each stock rate it and these rating are 
accumulated and displayed as follows;

Position 1 = number of analysts recommending "strong buy"
Position 2 = number of analysts recommending "moderate buy"
Position 3 = number of analysts recommending "hold" or "neutral"
Position 4 = number of analysts recommending "moderate sell"
Position 5 = number of analysts recommending "strong sell" 

Example rating 5-3-1-0-0 would be 5 "strong buys", 3 "moderate buys",
1 "hold" recommendation.



RFMD - RF Micro Devices
OMC  - Omnicom Group
INSS - Int'l Network Services
BVSN - BroadVision, Inc.


IBM  - Int'l Business Machine
NEON - New Era of Networks
SBUX - Starbucks
CGX  - Consolidated Graphics
LXK  - Lexmark Int'l
GIS  - General Mills
NSOL - Network Solutions

Remember that historically, when we drop a pick it will go up 
10 to 15% the very next week. It is part of Murphy's Law.
Just because we drop a stock as a pick does not mean we are
advocating a "sell" on any position you have. We are simply
dropping our recommendation as a new play. Existing plays
can and do continue on and are usually profitable.


DELL $40.25 (-1.94) We debated whether or not to keep Dell 
on the play list under the rules of "double-secret probation".  
Dell lost.  The Street is quite focused on PC industry weakness,
especially in the wake of IBM downgrades and anticipated 
warnings.  Dell closed at its low of the day, slightly below 
support.  It won't fare well in a downdraft or market 
correction.  Consider it dropped.

PVN $107.75 (-6.69) PVN has been a great play for us until 
this past week. It got ahead of itself when it hit $118.44 
on March 12, and this week it gave back $6.69 of its previous 
gains. We still like PVN--it has an incredible growth rate 
and we think a split announcement is possible with its next 
earnings report. However, it has added over $75.00 since its 
October 8 low, and it needs time to rest and consolidate its 
gains before the next leg up. We are dropping PVN for now, 
but we will be watching for a turnaround.

BA $34.00 (-.94)  BA's CEO Condit, put an end to the rumors
that GE would be buying BA's commercial jetliner business.  
In a Bloomberg release, the CEO of BA plainly denied any
rumor of a buyout from GE.  With the rumor being put
to rest for the time being, BA ceases to be much of a 
rumor play.  We'll keep an eye on this if it develops further.

KMB $49.94 (-0.50)  Patience may be a virtue, but the small 
gains KMB has made just aren't enough for us to keep this as 
a play.  It may breakout out of its tight trading range 
sometime soon or it may not. The stock closed down -0.50 on 
Friday and this put it right on its 10dma. There are better 
plays out there and time is money, so we're dropping it.

KSS $73.50 (-1.88)  After hours on Thursday, Kohl announced 
it would begin its previously mentioned public offering of 
4.26 mln shares at $73.50.  This will net the company around 
$199 mln, but it will use the majority of the money to renovate 
33 Caldor stores it recently bought from the bankrupt chain.  
As a result of this news, the trading volume hit 3.5 mln on 
Friday versus its ADV of 390K and the stock fell $1.50 to 
close, ironically enough, at $73.50. This drop pushed KSS 
below its 10 dma.  It may bounce up a little on Monday, but 
the gains have been too small for us to keep it as a play 
and we're dropping it.

LGTO $53.13 (-3.50) LGTO didn't have the greatest week.
While it has been a good pick for us ($49.25 to over $56),
Thursday it began to weaken and Friday it crashed through 
its 10 dma.  It is quite possible that it might bounce next
week and it does have support near $50.  However, there
has been very little profit taking and it needs to 
consolidate.  We'll wait for the next trend.


Nav $40.38 (+2.25) Nav gapped down slightly at the open 
and looked O.K. as a put until mid-day, when it rose above 
its 10 day moving average. It pulled back briefly, but 
still ended the day above that ceiling--which might now become 
a floor of support. We have to drop this one since technicals 
indicate that it may now have support at this level.


LXK  - Lexmark Intl Group Inc
VOD  - Vodaphone
MWD  - Dean Witter
CMGI - CMG Info  ***** announced ******
CL   - Colgate
SCH  - Charles Schwab
GE   - General Electric
QCOM - Qualcomm
AOL  - America On Line
MWD  - Morgan Stanley
RNWK - RealNetworks
TLAB - Tellabs

We don't list all splits available, only those we 
feel may have play possibilities. 

Symbol - Stock      Splits/Date  

NSOL - Network Solution2:1 03-23-99 ex-date 03-24 put play
CTXS - Citrix Systems  2:1 03-25-99 ex-date 03-26 put candidate
IMNX - Immunex         2:1 03-25-99 ex-date 03-26 current play
MSFT - Microsoft       2:1 03-26-99 ex-date 03-29 current play
LU   - Lucent          2:1 03-31-99 ex-date 04-01
VIA  - Viacom          2:1 03-31-99 ex-date 04-01 Good chart
NEG  - Energy East     2:1 04-01-99 ex-date 04-05
DCLK - Double Click    2:1 04-02-99 ex-date 04-05 
INSS - Intl NtwkSvcs   3:2 04-05-99 ex-date 04-06 current play
SUNW - SunMicro        2:1 04-08-99 ex-date 04-09 play over $104
INTC - Intel           2:1 04-11-99 ex-date 04-12
EXDS - Exodus Comms    2:1 04-12-99 ex-date 04-13
CMVT - Comverse Tech   3:2 04-15-99 ex-date 04-16
FSR  - Firststar Cor   3:1 04-15-99 ex-date 04-16 current play
MNMD - MiniMed Inc.    2:1 04-16-99 ex-date 04-19
WMT  - Walmart         2:1 04-19-99 ex-date 04-20 current play
ZQT  - Quicksilver     3:2 04-23-99 ex-date 04-26
FDX  - FDX Corp        2:1 05-05-99 ex-date 05-06
COX  - Cox Comms       2:1 05-13-99 ex-date 05-14
AOC  - Aon Corp        3:2 05-17-99 ex-date 05-18
IBM  - IBM             2:1 05-26-99 ex-date 05-27 put play
CMGI - CMGI Inc        2:1 05-27-99 ex-date 05-28
EMC  - EMC Corp        2:1 05-28-99 ex-date 05-31 current play
PFE  - Pfizer Corp     3:1 To Be Announced        current play

For a complete list of all the coming splits check out the
"split calendar" on the side of the online edition newsletter

We always recommend selling the day of the actual 
split. Profit taking will drive down the price on an
average of 7 of 10 splitters immediately after the split.
They may come back in a week or two but why risk it ! 

FSR - Firstar Corp $92.63 (+0.38)

Stock splits 3:1 04-15-99

See details in sector list

Chart = http://quote.yahoo.com/q?s=fsr&d=3m
INSS - International Network Services $66.75 (+3.25)

Stock Splits 3:2 04-05-99 

See details in sector list

Chart = http://quote.yahoo.com/q?s=INSS&d=3m
RFMD- RF Micro Devices $95.13 (+9.82)

Stock Splits 2:1 Mar-31st

See details in sector list

Chart = http://quote.yahoo.com/q?s=RFMD&d=3m
WMT- Wal-Mart $94.75 (-1.63)(+3.13)(+7.12)(+1.38)(+.75P4W)

Stock Splits 2:1 04-19-99 

See details in sector list

Chart = http://quote.yahoo.com/q?s=WMT&d=3m
PFE - Pfizer, Inc $140.75 (+0.37)

Stock Splits  3:1 To Be Announced

See details in sector list

Chart = http://quote.yahoo.com/q?s=PFE&d=3m
IMNX - Immunex Corp. $178.38 (+10.13)(+14.75)(+12.00)

Stock splits 3-25 2:1

See details in sector list

Chart = http://quote.yahoo.com/q?s=IMNX&d=3m
MSFT - Microsoft $171.19 (+11.00)(+5.25)(+4.81)(P4W -24.87)

MSFT is 2 weeks away from its 2:1 split date of March 26.  

See details in sector list

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m
EMC - EMC Corporation $112.25 (+7.69)(+2.19)(-1.56)(+1.56)

EMC splits 2:1 on 5/28

Details in sector list

Chart = http://quote.yahoo.com/q?s=EMC&d=3m


With all the great plays each week we can never decide
on just one so take your pick. 

MSFT - Microsoft $171.19 (+11.00)(+5.25)(+4.81)(P4W -24.87)

See plays in sector list

Chart = http://quote.yahoo.com/q?s=msft&d=3m
IMNX - Immunex Corp. $178.38 (+10.13)(+14.75)(+12.00)

See plays in sector list

Chart = http://quote.yahoo.com/q?s=imnx=3m
GE -  General Electric $112.00 (+4.62)(+1.38)(+5.69)

See plays in sector list

Chart = http://quote.yahoo.com/q?s=ge=3m
MWD - Morgan Stanley Dean Witter $101.63 (+.50)(+2.19)(P5W+12.66)

See plays in sector list

Chart = http://quote.yahoo.com/q?s=mwd=3m

Brokerage/Banking - Sector

FSR - Firstar Corp $92.63 (+0.38)

Firstar is a bank holding company offering a full range 
financial services to both consumers and businesses.  The 
stars came into alignment when the old Firstar and Star Banc 
recently merged.  Together they have 700 branches in 9 states 
and target the mid-western market.

FSR is a short-term split play. On March 9th, they announced 
a powerful 3 for 1 stock split set for April 15th.  Since 
that time, this stock has been in a steady uptrend.  It 
spiked up almost 4 points on Thursday and we warned if the 
market made any correction FSR would follow.  Well it did and 
 stock gave back -2.94 to close down with the DOW.  Use 
these dips as entry points and consider target shooting this 
play.  Be aware that even a 3:1 split is not going to be 
able to hold FSR up if the Dow decides to dive. Confirm
upward movement.

This company is just what its name suggests - a star.  
Economist magazine recently rated Firstar the #2 financial 
institution for shareholder performance out of 400 of the 
worlds leading banks, insurers, and security houses.

BUY CALL APR- 90 FSR-DR OI= 166 at $5.13 SL=3.25
BUY CALL APR- 95*FSR-DS OI=1233 at $3.00 SL=1.50
-no activity on APR-100s
BUY CALL JUN- 95 FSR-FS OI= 343 at $5.88 SL=4.00
BUY CALL JUN-100 FSR-FT OI= 890 at $4.00 SL=2.50

Picked on March 18th at $95.56       PE = 47
Change since picked      -2.93       52 week low  = $54.18
Analysts Ratings     6-8-3-0-0       52 week high = $95.56
Last earnings on  12/98   est= .72   actual= .72
Next earnings on  4-13    est= .77   versus= .63
Average Daily Volume = 897.9 k
Chart = http://quote.com/q?s=FSR&d=3m

C -  Citigroup $64.25 (-1.69)(+4.19)(+3.00)(+4.56)(P4W +2.56)

What do you get when you cross the largest credit card 
issuer and one of the largest insurance companies on the 
planet?  Citigroup, the largest financial services company 
in the world.  They offer investment services through 
Salomon Smith-Barney and Primerica, real estate services 
through Citicorp real estate, insurance through Travelers, 
not to mention consumer banking and credit cards through 
Citibank.  Sandy Weill and John Reed are co-CEO and co-
chairman of this $57 billion (sales) company

With interest rates having trouble falling back (Rubin 
resignation rumors, later denied) and overall fear of 
Greenspan raising rates to fight "inflation" (really? 
where?), C finished the week slightly negative, with only a 
$0.44 loss in Friday's heavy trading.  Last Tuesday, C 
announced a $2 billion share buyback (1.4% of the float).  
Operating results are growing stronger than expected in 
Latin America.  Salomon Smith Barney remains the growth 
engine.  Speculative financial merger fever is alive and 
well helping to push financial stocks up too.  C is nearing 
split range.  Their last split was a 3:2 in November 1997 
at about $75.  Earnings are scheduled for April 21.  There 
are not enough shares currently authorized without a 
shareholder vote.  But keep your fingers crossed.

Friday morning, C launched a $1.33 billion 3-year floating 
credit card issue with a 7 point spread, good for $93 
million net income per year before overhead and fixed 
expenses.  Chairman, Sandy Weill filed with the SEC to sell 
another 2 million shares, this on top of the 1 million he 
sold earlier this month.  3 million sold of the 20 million 
he owned is getting a little steep.  Keep your eyes open 
for some underlying development.

BUY CALL APR-60 C-DL OI= 7694 at $5.75 SL=4.25
BUY CALL APR-65*C-DM OI= 8678 at $2.38 SL=1.25
BUY CALL APR-70 C-DN OI= 4670 at $0.75 SL=0.00
BUY CALL JUN-65*C-FM OI=14105 at $4.75 SL=3.25

Picked on February 28 at $58.75       PE =24
Change since picked       +5.50       52 week high=73.50
Analysts Ratings     10-9-5-1-0       52 week low =28.50
Last Earnings 01/99 est .54  actual  .60 surprise +11.0%
Next Earnings 04-21 est .79  versus  .90
Average daily volume =   9.1 mln.
Chart = http://quote.yahoo.com/q?s=c&d=3m

JPM - JP Morgan & Co $123.13 (+1.13)(+7.44)

JPM is a premier international banking firm headquartered in
the US. It is a holding company for subsidiaries engaged in 
global banking and investment.  They offer services to 
corporations, institutions, and, of course, the very wealthy.

This financial powerhouse is holding up well in the DOW 10,000 
frenzy.  JPM has managed to stay ahead this week even with the 
profit-takers reaping their rewards. The dips make great entry 
points to start new plays. JPM has found support at around 
$121 since its breakout above $114 and twice this week flirted 
with its new resistance of $126.  The strong financial sector, 
the company's solid fundamentals, and its great technicals 
indicate this stock may go higher.  Always be prepared for 
the volatility of the market and put your stops in place.

All JPM got this week was positive press!  It was rumored that 
JPM is a top candidate for a takeover play by Chase Manhattan.
This is a suitable match since both are banks and have similar 
corporate cultures.  Also, Lehman Brothers raised their 
earnings estimates for the company to 1.57 from 1.38 citing 
a rebound in client trading volume and the whispers of further
mergers and acquisitions.   

BUY CALL APR-120 JPM-DD OI= 649 at $7.50 SL=5.75
BUY CALL APR-125*JPM-DE OI= 584 at $5.00 SL=3.25
BUY CALL APR-130 JPM-DF OI=2345 at $3.00 SL=1.50
BUY CALL JUN-130 JPM-FF OI= 212 at $7.38 SL=5.75

Picked on March 14 at   $122.00     PE = 25
Change since picked       +1.13     52 week low = $ 72.12
Analysts Ratings      1-4-9-0-0     52 week high= $148.75
Last earnings on 12/98 est= .37     actual= .42
Next earnings on 4-14 est= 1.47     versus= 1.80
Average Daily Volume = 978.8 k
Chart = http://quote.yahoo.com/q?s=JPM&d=3m

MWD - Morgan Stanley Dean Witter $101.63 (+.50)(+2.19)(P5W+12.66)

MWD is a diversified financial service organization which 
provides services in three main areas: securities, asset 
management and credit services.  The company was formed 
through the merger of Morgan Stanley Group Inc. and Dean 
Witter Discover & Co. in June 1997.  Credit services consist 
primarily of the issuance, marketing and servicing of the 
discover card.  The company provides financial and securities 
services on a global scale and credit and transaction services 
nationally.  The securities business serves the investment 
needs of clients by providing a range of financial products, 
services and investment advice.  During 1997 the company acquired 
Discover Brokerage Direct In (formerly Lombard Brokerage Inc).

Friday was an ironic day for MWD.  At one point it reached
another 52-week high, yet at another it bounced off its
support of $100.  MWD practically reached a 52-week high
each day last week, but finished up just $.50 on the week.
Earnings for MWD are scheduled for Thursday and this could
cause an earnings run for the first few days of the week. 
We had listed the first week of April as earnings, but it
is actually on the 25th of March.  MWD has plenty of shares
to do a 2-1 split and an announcement with earnings is could
happen.  MWD's shareholder meeting is April 9th. 

There are rumors again about Chase Manhattan buying Merrill
Lynch.  Merrill has spurned the offer previously, but CMB
is still in pursuit.  Rumors have it that after Merrill,
CMB was interested in MWD, but they also didn't like the
idea.  Though it is not likely that MWD is in play here,
the fact that a competing firm is, should help MWD's stock

BUY CALL APR-100*MWD-DT OI=2019 at $ 6.13 SL=4.25
BUY CALL APR-105 MWD-DA OI= 343 at $ 3.75 SL=2.25
BUY CALL JUL-105 MWD-GA OI= 102 at $ 9.50 SL=7.25

Picked on Feb.6th at      $89.00   PE = 17
Change since picked       +12.63   52 week low =$ 36.50 
Analysts Ratings       5-4-4-0-0   52 week high=$104.81
Last earnings on 01/99 est= 0.97   actual= 1.48
Next earnings on 03-25 est= 1.28   versus= 1.10
Average daily volume = 2.08 mln
Chart = http://quote.yahoo.com/q?s=MWD&d=3m  


SCH - Charles Schwab $89.63 (+5.63)(+3.00)(+6.44)(+5.50)

Charles Schwab is a holding company with subsidiaries that 
provide financial services, which include discount brokerage, 
trade execution, investment, advisory services, and admini-
strative services. One subsidiary performs clearing and 
account maintenance and another is a market maker in Nasdaq 
securities. Schwab is the largest discount brokerage in the 
U.S., and operates 235 branch offices in 46 states, Puerto 
Rico, and the U.K. On Feb.8, it also entered the Canadian 
market through an acquisition.

Online securities trading is growing by leaps and bounds. 
Last quarter it increased 34% over the previous quarter. One 
in seven trades is now placed through the internet.  With 
this growth in mind, investors have sent Internet brokers' 
stocks soaring in recent months. Online trading at Schwab was 
up 65% in January, and assets in customer accounts reached 
$521 billion by the end of that month, an increase of 40% 
over last year. Schwab handled 153,000 trades/day in January,
and has doubled its capacity for trades during the past 
three months. Schwab has been growing around 20% per year, 
but numbers like these suggest that is currently enjoying a 
much higher growth rate. Schwab commands about 30% of the 
online trading market and continues to make improvements 
(i.e. with greatly increased trading capacity and their new 
Signature Service for their best customers). It is also 
settling with 300 customers who were unable to cancel online 
orders to buy the IPO Globe.com last November. SCH remains 
above its 10 dma. PEs in the online brokerages are high and 
reflect online trading growth expectations. As long as it 
continues to grow, this market leader will grow with it.

On Friday, Schwab set a new high of $92.81 before dropping 
with the market. While other stocks fell hard, Schwab lost 
only 6 cents on strong volume. After a recent 15 minute 
online trading glitch, SCH said that its trading capacity 
will soon handle 250,000 trades at any one time; this compares 
to a 10,000 trade capacity last year. Internet trading in 
Japan is still in its infancy, but it is beginning to heat 
up. Sony Corp. is rumored to be interested in a venture with 
Schwab into online trading there. In split territory and 
looking good to continue moving up, market permitting.
BUY CALL APR-85 SCH-DQ OI=1666 at $ 9.63 SL= 7.25
BUY CALL APR-90 SCH-DR OI=1407 at $ 6.75 SL= 4.75
BUY CALL APR-95 SCH-DS OI= 590 at $ 4.75 SL  3.00
BUY CALL JUN-90 SCH-FR OI= 461 at $11.88 SL= 9.25

Picked on Feb 21 at  $69.06     PE = 97
Change since picked  +20.57     52 week low =$18.50
Analysts Ratings  2-0-6-0-0     52 week high=$89.56
Last earnings on 12/98 est=.23  actual=.26 surprise=13%
Next earnings on  4-15 est=.26  versus=.17
Average daily volume = 2.02 mln
Chart = http://quote.yahoo.com/q?s=sch&d=3m




The Option Investor Newsletter          3-21-99
Sunday             Part 3 of 6

MER - Merrill Lynch $90.75 (+3.50)(P4W+18.12)

Merrill Lynch is a leading global financial management and 
advisory company with a presence in 43 countries across six 
continents. MER provides investment, financing, insurance,
and related services to both individuals and institutions. 
Its client assets total more than $1 trillion. As an
investment bank, it is a top underwriter of debt and 
equity securities. In addition to brokerage accounts, it 
offers one of the largest mutual fund groups available.

After a skyward climb to reach a high of $109.13 in July, 
1998, Merrill Lynch plunged to only $35.75 on October 8. 
The entire market bottomed on that day, but large banks and 
brokers were hit especially hard due to hedge fund, currency, 
and leveraged investment losses. MER rebounded to $80.00 by 
the end of November, but could not pass the $80 resistance 
level until early March. Investors had begun rotating into 
the brokerage sector, and on March 4, MER surged past resistance 
following an upward earnings revision by Soloman Smith Barney. 
It has been climbing ever since and has now been up 5 weeks 
in a row. The whole financial sector is hot and will probably 
continue to be as further consolidation in the industry takes 
place. MER has long refused to offer online trading, but it 
recently reversed that policy and purchased L.P. (DESoFT), 
a developer of Internet technology for financial institutions.
(If you can't beat 'em, join 'em!) One in 7 trades is now done 
online and MER can't afford not to offer Internet trading. 
On Thursday, 3-4, MER quietly opened online trading to a 
limited number of its customers with special accounts. 

The news is consolidation in the banking industry. Chase 
Manhattan(CMB) wants to add underwriting and other 
investment services to its current offerings, and is said 
to be considering an acquisition. An April 5 Forbes magazine 
article due out on Monday confirms that Merrill Lynch is 
reconsidering an offer from the third largest bank to merge. 
Walter Shipley, the chairman and CEO of CMB, has reportedly 
offered the head honchos at Morgan Stanley, JP Morgan, Goldman 
Sachs, and Merrill Lynch the position of CEO as enticement to 
consider a merger deal. (Alternatively, CMB might buy 2 smaller 
brokers instead of one large one.) Speculation is now centered 
on MER as the merger favorite, and that is helping the stock 
price. After gapping open and reaching $94.50 Friday morning, 
MER sold off with the market. If you want to play this one, 
you now have a better entry point. First wait for the market 
to turn positive.

BUY CALL APR-85 MER-DQ OI=5413 at $ 9.25 SL= 7.00
BUY CALL APR-90*MER-DR OI=4175 at $ 6.38 SL= 4.50
BUY CALL APR-95 MER-DS OI=2235 at $ 4.25 SL= 2.50
BUY CALL JUL-95 MER-GS OI= 865 at $ 8.63 SL= 6.50

Picked on Feb 28 at $76.75      PE= 29
Change since picked +14.00      52 week low =$ 35.75
Analysts Ratings 4-2-6-0-0      52 week high=$109.13 
Last earnings 12/98 est= .63 actual= .86 surprise=37%
Next earnings  4-13 est=1.13 versus=1.30
Average daily volume = 3.19 mln
Chart = http://quote.yahoo.com/q?s=mer&d=3m


AOL -  America On Line $119.25(+23.12)(+9.19)(P4W+4.94 s/a)

America Online is the largest online Internet access 
service in the world.  Membership now exceeds 18 million 
users, including its Compuserve division.  With 25,000 new 
users added per day (1,000,000 in the first 40 days of the 
quarter), and growing advertising revenues, AOL has been 
called the blue chip of the Internets.  The justice 
Department has now cleared the way for AOL to complete its 
long awaited purchase of Netscape.  Revenues should exceed 
$4.5 billion in FY99, up from $2.6 billion in 

WOW!  What a week for AOL!  Look around.  We're in split 
territory again ($120)!  There are only enough shares for a 
3:2, not a 2:1.  But who would vote no if asked to 
authorize more shares?  Not us!  The news won't 
specifically report why AOL blasted into orbit.  It's up to 
us as traders to figure it out.  Here's our best educated 
guess:  With AOL's completion of its Netscape purchase, AOL 
gains 11% more of its original weight in the S&P 500 index 
(SPX) by rising from .94% to 1.04% of the index.  
Seemingly, this is no big deal.  But as an index fund, you 
need to buy more AOL to keep the portfolio balanced.  
Second, those funds who refused to immediately add AOL to 
their index portfolios when AOL first became a part of the 
SPX in January, citing high valuation ("we're not buying 
until the price falls") don't want to be left in the cold 
again as AOL becomes the Internet group favorite.  High 
volume last week confirms the buying.  While the chart is 
brilliantly positive, AOL can't extend like this forever; 
profit taking can ensue any minute.  Keep your stops in 
place to protect your profits and enjoy the ride.  Confirm 
market direction before starting a new play.

The buzz on the street is that Netscape may lay off as many 
as 700 of its 2500 workers worldwide now that the merger 
with AOL is complete.  Engineers can relax.  AOL needs them 
badly, so their jobs are considered safe.  If layoffs 
happen, some may be rehired to implement new e-commerce 
strategies.  No formal word from the company yet.  FYI, 
Barron's ranked AOL #1 for total return of 585% for the 
last 12 months in its first annual Barron's 500.  Dell was 
a distant second.

BUY CALL APR-115 AOO-DC OI=5994 at $10.63 SL= 8.25
BUY CALL APR-120*AOO-DD OI-6081 at $ 8.13 SL= 6.25
BUY CALL APR-125 AOO-DE OI=2050 at $ 5.88 SL= 4.25
BUY CALL JUL-125 AOO-GE OI=1189 at $15.50 SL=12.00

Picked on March 14 at $96.13         PE =NA
Change since picked   +23.12         52 week high=121.25
Analysts Ratings  23-7-0-0-0         52 week low =15.12
Last Earnings 01/99 est  .09 actual .09 surprise =0%
Next Earnings 04-21 est  .09 versus .04
Average daily volume =  23.7 mln. (skewed by recent split)
Chart = http://quote.yahoo.com/q?s=aol&d=3m


RNWK - RealNetworks $141.75 (+46.63)(+5.83)(+19.37)(+7.00)

RealNetworks pioneered the streaming software that allows 
audio and video broadcasters to deliver their products over 
the World Wide Web in real time.  The company's RealPlayer 
software is used by more than 30 million Web surfers who 
download the software for free.  Software license fees from 
broadcasters account for more than 75% of RealNetworks' sales.  
Companies that have purchased the company's broadcasting tools 
and services include ABC, At Home (Internet services), Dow 
Jones, and NBC. 

Wow! RealNetworks has provided real money!!!  Sometimes
its best to be lucky and good.  RNWK has increased over
$70 since we first suggested it on February 27th.  We like
it.  RNWK's run can be attributed to many things, but as
of late the rumor it will be taken over has really driven
the price up.  RNWK has announced several different agree-
ments which definitely hasn't hurt either.  We really like
the fact that RNWK went up over $14 on Friday on a very 
bad market day.  With the gains RNWK has had, be careful
about starting new plays at the top.  The best way to play
this stock is to target shoot.  It tends to have large intra-
day swings.  Needless to say, this is a prime profit-taking
target.  Be prepared.

RNWK has added its product to support some of the biggies
in the browser business.  They are in agreements with AOL and
MSFT to provide streaming audio and video.  RNWK's has also
introduced RealGuide, a comprehensive source of online 
streaming programming on the Internet.

BUY CALL APR-130 QRN-DV OI= 41 at $27.75 SL=21.50 ITM $11.75
BUY CALL APR-135*QRN-DY OI=196 at $25.25 SL=19.50 ITM $ 6.75	
BUY CALL MAY-130 QRN-EV OI=  0 at $33.75 SL=26.50 ITM $11.75
BUY CALL MAY-135 QRN-EY OI= 13 at $31.75 SL=24.75 ITM $ 6.75
(135 is highest current strike)

Picked on Feb.27th at   $70.13   PE = n/a
Change since picked     +71.75   52 week low =$ 14.50
Analysts Ratings     1-7-2-0-0   52 week high=$145.50
Last Earnings   01/99 est -.04   actual -.02
Next Earnings   04-27 est -.02   versus -.07
Average daily volume = 1.05 mln
Chart = http://quote.yahoo.com/q?s=RNWK&d=3m


RFMD - RF Micro Devices $95.13 (+9.82)

RF Micro Devices designs, develops and markets proprietary 
analog radio frequency integrated circuits (RFICs)for wireless
communications applications such as cellular and PCS phones, 
cordless phones, wireless LANs, wireless local loop handsets, 
industrial radios, wireless security and remote meter reading. 
The Company offers a broad array of products -- including 
amplifiers, mixers, modulators/demodulators, and single-chip 
receivers, transmitters and transceivers -- that represent a 
substantial majority of the RFICs required in wireless 
subscriber equipment. The Company's strategy is to focus on 
wireless markets by offering a broad range of standard and 
custom designed RFICs in order to position itself as a 
"one-stop" solution for its customers' RFIC needs.

RFMD has been on a tear since the summer of 1998. It has 
added over 80 points since early July, and the climb now has 
renewed momentum since the company announced a 2-for-1 stock 
split on March 3rd. The split will occur on March 31st or 
thereabouts for shareholders of record March 17th. Credit Suisse 
First Boston had just raised its earnings estimates 2 cents 
before the split announcement.  This company is engaged in a 
business that should see considerable growth in the near 
future. Our main reason for this play, however, is the 
expected split run.

RFMD has a pullback about every 3 to 5 days, and after its 
pullback Thursday, it shot up $3.63 on Friday even as the 
rest of the market headed south. This is our bounce upward
and an entry point.  However, with the Dow suddenly allergic
to 10,000 confirm upward movement in the market and stock 
before playing.

BUY CALL APR- 90 RQZ-DR OI=168 at $11.63 SL= 9.25
BUY CALL APR- 95*RQZ-DS OI=102 at $ 9.00 SL= 6.75
BUY CALL APR-100 RQZ-DT OI=104 at $ 6.88 SL= 5.00
BUY CALL MAY- 95 RQZ-ES OI=  4 at $13.38 SL=10.75
BUY CALL MAY-100 RQZ-ET OI= 30 at $11.25 SL= 9.00

Picked on Mar 21st at $95.13        PE=n/a
Change since picked    +0.00        52 week low= 10.50
Analysts' ratings  6-2-0-0-0        52 week high=103.75
Last earnings on 12/98 est=.22  actual= .31 surprise=40%
Next earnings on  4-21 est=.35  versus=-.21
Average daily volume = 359.3k
Chart = http://quote.yahoo.com/q?s=RFMD&d=3m


QCOM -  QUALCOMM Inc. $84.56 (+7.31)(+0.68)(+3.56)

Wireless digital communications are QCOM's specialty.  They 
have developed "CDMA" technologies used in cellular, personal 
communication, and wireless local loop systems.  The trucking 
industry uses QCOM's OmniTRACS two-way satellite messaging and 
position tracking systems.  Qualcomm has currently teamed up 
with Loral space to develop the Globalstar satellite system to 
offer telecommunication services worldwide.  Eudora, a type of 
e-mail software, is also a QCOM production.

QCOM finished the week of trading strong with a combined gain 
of +$4.44 coming from Thursday and Friday trading alone.  The 
company set an all time high of $85.81 as well on Friday.  This 
company is more and more likely to split the higher it moves.  
It has plenty of authorized shares and split 2:1 at the $60 
level back in 1994.  Watch for QCOM to keep up the good work.  
However, make sure to set your stop losses accordingly to prevent
unnecessary losses if the company decides to take a breather.

News:  In a poll released on Friday by Everen Securities Inc., 
Qualcomm's phone model QCP2700 was the most recommended model 
by retailers for the second quarter in a row.  In other news, 
QCOM has begun to sell on its website SoloPoint Inc.'s M-200 
Mobile Phone Companion.  This "companion" allows customers to 
use their wireless phones to listen to and screen messages 
being left on their home or office phones.  
BUY CALL APR-80 QAQ-DP OI=1750 at $ 7.88 SL= 6.25
BUY CALL APR-85*QAQ-DQ OI= 822 at $ 5.00 SL= 3.25
BUY CALL JUL-85 QAQ-GQ OI=1047 at $10.25 SL= 7.50
Picked on March 9th at $79.75      PE= 50
Change since picked   +$ 4.81      52 week low =$37.75
Analysts Ratings    5-5-6-0-0      52 week high=$85.81
Last earnings 01/99 est 0.58   actual 0.65 surprise=+12% 
Next earnings 04-21 est 0.25   versus 0.58
Average Daily Volume = 1.69 mil
Chart = http://quote.yahoo.com/q?s=qcom&d=3m


WCOM - MCI WorldCom, Inc. $91.50 (+5.56)(+3.13)

MCI WorldCom is the #2 telecommunications provider.  AT&T 
holds the top spot for now.  WCOM was formed in 1998 when 
WorldCom acquired MCI Communications.  The company now provides
telecommunication services to business, government, and 
consumer customers by using fiber optics, digital microwave 
technology, and satellite stations.  WCOM is also part owner 
of American Sky Broadcasting and offers Internet access 
through an alliance with AOL. 

WCOM set an all time high on Thursday only to top it on Friday 
by extending even higher to $94.25.  However, the volatility 
associated with triple witching Fridays can make or break a 
a good week.  The volatility pushed WCOM to its new high 
and also dragged it back down to a loss of -2.25 by the close.  
After being up for six days in a row, this may be the pull back 
we were looking for.  This could be a great opportunity to buy 
on the dip.  But, be patient and wait for the upward 
confirmation as always!

News:  WCOM may eventually have some competition in the $111 
billion Japanese market.  BT and ATT are close to buying a 
stake in Japan Telecom.  However, the early bird catches the 
worm.  Since WCOM was the first foreign company granted a 
license to offer phone services in Japan, it remains to be 
seen how successfully BT and ATT can attain a market share.  
WCOM is already building up its network and is close to 
signing a deal which could provide them with further access 
to customers' buildings.  

BUY CALL APR-90*LDQ-DR OI=6054 at $4.88 SL=3.25
BUY CALL APR-95 LDQ-DS OI=3492 at $2.56 SL=1.25
BUY CALL JUN-95 LDQ-FS OI=5805 at $5.75 SL=4.25 

Picked on March 18th at $93.75      PE= N/A
Change since picked    -$ 2.25      52 week low =$39.00
Analysts Ratings    22-8-3-0-0      52 week high=$94.25
Last earnings 02/99 est 0.10   actual 0.23 surprise=+130% 
Next earnings 05-05 est 0.34   versus 0.10
Average Daily Volume = 11.6 mln
Chart = http://quote.yahoo.com/q?s=WCOM&d=3m


TLAB - Tellabs Inc. $92.13 (+1.44)(+1.69)

Tellabs, Inc. designs, assembles, markets and services a 
diverse line of electronic communications equipment.  These 
products are used worldwide by public telephone companies, 
long-distance carriers, alternate service providers, cellular 
and other wireless service providers, cable operators, 
government agencies, utilities and business end-users.  The 
TITAN cross-connect system family is the key element of the 
companies product portfolio.  

TLAB looked very strong for the week until Fridays drop.  
TLAB took a dip of $2.38 on Friday, thought it still finished
positive for the week.  TLAB has support at around $88, and
this could very well be tested with the rumors of pre-earnings
warnings from IBM.  A bounce off the $88 level could be an
ideal risk/reward situation.  Make sure that the market has
decided to continue up before buying into new call plays.  

TLAB is being mentioned a lot when analysts talk about the
two small companies Ciena is buying.  Many feel that Ciena
made a mistake by not allowing TLAB to take them over.  TLAB
is positioned very well for the future and its stock should

BUY CALL APR- 90 TEQ-DR OI= 329 at $ 6.75 SL=5.00 ITM $2.13
BUY CALL APR- 95*TEQ-DS OI= 612 at $ 4.50 SL=2.75
BUY CALL JUN- 95 TEQ-FS OI=1406 at $ 9.00 SL=6.75
BUY CALL JUN-100 TEQ-FT OI= 888 at $ 7.13 SL=5.25

Picked on Mar.13th at   $90.69   PE = 38
Change since picked      +2.44   52-week low =$31.38
Analysts Ratings   14-13-1-0-0   52-week high=$97.25
Last Earnings    01/99 est .59   actual .62
Next Earnings    04-26 est .49   versus .37
Average daily volume = 2.78 mln
Chart = http://quote.yahoo.com/q?s=TLAB&d=3m

BVSN - BroadVision, Inc. $66.00 (+5.00)

BroadVision wants to facilitate Web commerce.  Its BroadVision 
One-To-One software lets companies design their own Web sites 
to maximize potential for online sales and marketing.  One-
To-One allows users to manage online transactions involving 
ordering and payment, order fulfillment, billing, customer 
service, and other activities.  It also lets users collect, 
track, and manage information about Web site visitors and 
use the resulting profiles to customize content.  Customers 
include Prodigy Services Company and Olivetti Telemedia.  
The company has offices in the US, Asia, and Europe.  The Asia
Pacific region and Europe account for about 50% of sales. 

BVSN has been on a very nice run as of late.  We like the 
fact that it is an Internet play that hasn't yet exploded
off the charts.  This play feels oddly similar to RNWK when
we first picked it up.  We can't make the prediction that 
BVSN will rise like RNWK, but we like its prospects.  BVSN
is at the forefront of self-serve Internet sites.  This
area has huge potential.  BVSN reached an intra-day high
of $68.13 on Friday, which is also a 52-week high and all-
time high.  BVSN has risen along its ascending 10-dma.  This
currently lies just above $59.  Be wary of the market trend,
but BVSN did increase nicely Friday even on a down market day.

BVSN is reaching agreements continuously with company's needing
their One-to-One software, most recently with Metamor Consulting.
Earnings are toward the end of April and are expected to be

BUY CALL APR-65*QVB-DM OI=114 at $ 5.50 SL=3.75 ITM $1.00
BUY CALL APR-70 QVB-DN OI=501 at $ 3.63 SL=2.00
BUY CALL JUN-65 QVB-FM OI=  5 at $10.13 SL=7.50 ITM $1.00
BUY CALL JUN-70 QVB-FN OI=151 at $ 8.63 SL=6.50 (new strike)

Picked on Mar.20 at    $66.00   PE=157
Change since picked     +0.00   52 week low =$ 9.25
Analysts Ratings   8-10-1-0-0   52 week high=$68.13
Last earnings   01/99 est=.08   actual= .08
Next earnings   04-27 est=.08   versus=-.02
Average Daily Volume = 678.8 k
Chart = http://quote.yahoo.com/q?s=BVSN&d=3m


INSS - International Network Services $66.75 (+3.25)

INSS is a global provider of network consulting and software 
solutions. It supplies customers with planning, designing, 
and implementation procedures as well as monitoring their 
performance.  INSS also offers intranet management to its 
customers like MCI Worldcom and AT&T.  Cisco holds a minority 
stake in INSS while the founder of INSS, Donald McKinney, 
owns a third.   

INSS will split 3:2 on April 5th.  The two to three weeks before 
the split are usually the times of biggest movement.  INSS has 
been on a steady uphill climb.  The -$3.25 dip on Friday may 
provide an entry point.  INSS should break through its all 
time high of $71.13 into blue sky territory with the split 
momentum providing the fuel. Confirm market direction first!

News:  INSS is always looking to help its customers.  The 
company recently released results from one of its Web surveys 
which found that "organizational issues are overwhelmingly the 
top challenge and barrier for reducing network and systems 
management total coast-of-ownership." (-PRNewswire)

BUY CALL APR-65*XQS-DM OI=203 at $5.25 SL=3.75
BUY CALL APR-70 XQS-DN OI=102 at $3.00 SL=1.50
BUY CALL JUN-65 XQS-FM OI= 25 at $8.88 SL=6.75
BUY CALL JUN-70 XQS-FN OI= 10 at $7.00 SL=5.25
Picked on March 21st at $66.75      PE= 149
Change since picked    +$ 0.00      52 week low =$24.63
Analysts Ratings     3-7-1-0-0      52 week high=$71.13
Last earnings 01/99 est 0.08   actual 0.19 surprise=+138% 
Next earnings 04-27 est 0.20   versus 0.10
Average Daily Volume = 267.1 K
Chart = http://quote.yahoo.com/q?s=INSS&d=3m


MSFT - Microsoft $171.19 (+11.00)(+5.25)(+4.81)(P4W -24.87)

From their own words, "Microsoft Rules." Although it's 
current reign is being rocked with revolution, the Evil M-
pire (as some programmers and anti-Internet Explorer 
browser patriots call it), has been fighting the Federal 
government on anti-trust grounds for months. The line to 
take their turn and bad mouth the bully was long and 
distinguished.  Their defense was pitiful.  The fact is, 
MSFT is good at what they do.  They are the world's #1 
software company (Y2K compliant or not!) and their 
operating systems dominate the PC landscape. 

No fear of slowing PC sales here.  MSFT splits 2:1 this 
week (March 26).  Market willing, we should have another 
great week.  Next earnings are not until April 22. 
Technically, the chart looks great.  Overhead resistance is 
way up at $176, its high set in the wake of truly blowout 
earnings.  Careful.  Remember, although MSFT announced a 
week ago last Thursday that they are on target to meet 
analysts' estimates, they expect a sequential slow-down in 
revenues.  This is about as close as you can get to "no 
earnings surprise" without saying it.  On principle, we 
recommend you sell before the split since prices fall 7 of 
10 times following a split.  When the split is over, or 
worse, if the market retreats before the split, there will 
be nothing to support the price.  Keep the stops tight to 
protect your profits and only play in a rising market.

We're still waiting for that speculated reorganization 
plan.  Frankly, there is no reason to get specific until 
near the resumption of the trial, but the rumors are still 
circulating.  MSFT released its new IE 5 browser last week.  
It's not as dependent on Windows for operation and will 
work with other operating systems.  DOJ will use this to 
say "see, it can be unbundled and sold as a separate 
product".  DOJ theory is MSFT previously bundled IE with 
Windows to thwart competition.  It's a sideshow and won't 
affect the outcome of the trial.

BUY CALL APR-165 MSQ-DW OI=11684 at $12.88 SL=10.00
BUY CALL APR-170*MSQ-DV OI=15925 at $10.38 SL= 8.00
BUY CALL APR-175 MSQ-DO OI= 8773 at $ 7.88 SL= 6.25

(Split Play)

Average daily volume = 16.0 mln

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m


EMC - EMC Corporation $118.25 (+6.00)(+7.69)(P3W +2.19)

EMC is a Fortune 500 company that designs, manufactures, 
markets an supports high performance storage products.  The 
company's products store retrieve, manage, protect and 
share information from all major computing environments, 
including UNIX, Windows NT and mainframe platforms.  EMC 
markets its memory products under the name Symmetrix.  EMC 
and its enterprise storage systems have developed a clear-
cut technological edge over its competition.  The company 
has been able to successfully leverage its leadership 
position in the mainframe storage area into the lucrative, 
faster growing open systems market.  

EMC is the leader in data storage.  It is a requirement in 
the digital age for most companies to archive the growing 
mountains of data transmitted via corporate intranets and 
the Internet.  While not completely recession proof, demand 
for data storage does not slow down with the rest of the 
economy.  In fact it grows no matter what, and accelerates 
as data transmission becomes more ubiquitous and cheaper by 
the month.  EMC's share price growth is second only to 
Dell's over the last decade.  The technical chart shows 
lots of positive strength.  $122.19 is overhead resistance 
set intraday last Thursday.  Watch for profit taking since 
EMC has risen $20 in the last month without much pull back.  
We know it sounds like a broken record but keep your stops 
tight to protect those profits, confirm market direction 
before playing.

Sparse news for EMC last week, but as reported Thursday, 
SoundView Technology Group raised EMC's FY00 earnings 
estimate to $2.64 from $2.41.  They left FY99 alone.  Just 
so you know, we haven't forgotten, EMC declared a 2:1 split 
back in February, but it's not effective until May 28.

*target shoot
BUY CALL APR-115*EMB-DC OI=4080 at $ 8.63 SL= 6.75
BUY CALL APR-120 EMB-DD OI=1949 at $ 5.75 SL= 4.25
BUY CALL APR-125 EMB-DE OI= 379 at $ 3.75 SL= 2.25
BUY CALL JUL-125 EMB GE OI=  38 at $11.63 SL= 9.00

Picked on Feb 14th at $118.25    PE=81
Change since picked     +9.87    52 week low =$ 34.25
Analysts Ratings   10-5-0-0-0    52 week high=$122.19
Last earnings   12-98 est=.46    actual=.48
Next earnings   04-22 est=.39    versus=.28
Average Daily Volume = 3.7 mln
Chart = http://quote.yahoo.com/q?s=EMC&d=3m


PFE - Pfizer, Inc $140.75 (+0.37)

Pfizer develops, markets and manufactures technology-
sensitive products in the field of medicine. Pfizer is the 
leading US maker of pharmaceuticals.  It developed the ever 
so popular anti-impotence drug, Viagra.  They also are top 
producers in Animal Health and Consumer Health care products. 
Some brands you may be familiar with are BenGay muscle rub 
and Visine eyedrops. 

The potency of the drug sector is still strong and no 
earth-shattering event dragged this stock down on Friday. It 
was simply the downward force of the market.  Pfizer shed 
$2.25 but still flirted with the $143 mark.  Thursday, PFE 
set its new 52 week high at $143.56 in intraday trading.  
This stock has found new support at around $140 and we need 
to see another bounce off this before initiating any new plays.
PFE is positioned right on its 10 dma.  Confirm stock and 
market direction and put your stops in place.  

On April 22nd, there is a shareholders meeting scheduled to 
approve a 3 for 1 stock split.  Unfortunately, at this time, 
Pfizer's Investors Relations had no additional information 
available.  In industry news, two companies announced the 
development of new drugs to compete with existing Pfizer 
products. Merck reported they were hoping for FDA approval 
of a new painkiller to rival Pfizer's Celebrex - the fastest 
selling new drug in history.  And Mylan Laboratories was 
given tentative approval for their generic version of Pfizer's
Procadia XL - a drug used for hypertension and angina.  
Neither announcement seemed to effect the stock; Pfizer 
has strong fundamentals and the blockbuster of all drugs,

BUY CALL APR-140*PFE-DH OI=3169 at $5.63 SL=3.75
BUY CALL APR-145 PFE-DI OI=1745 at $3.25 SL=1.75
BUY CALL JUN-145 PFE-FI OI=1281 at $7.88 SL=6.00

Picked on March 16th at  $142.00        PE = 55
Change since picked        -1.25        52 week low =$ 85.81
Analysts ratings     13-3-15-0-0        52 week high=$143.56
Last earnings on  12/98 est= .52        actual= .54
Next earnings on   4-14 est= .62        versus= .49
Average Daily Volume = 2.73 mln
Chart = http://quote.yahoo.com/q?s=pfe&d=3m




The Option Investor Newsletter             3-21-99
Sunday                4  of  6

IMNX - Immunex Corp. $178.38 (+10.13)(+14.75)(+12.00)

Immunex is biopharmaceutical company that develops and 
manufactures products to fight cancer, immunological 
disorders, and infectious diseases.  Some of its better 
known drugs include Leukine (used to treat bone marrow 
transplant patients), Novantrone (used for leukemia or 
prostate cancer patients), and Enbrel (for rheumatoid 
arthritis).  American Home Products owns a 54% stake 
in Immunex.

Triple-witching Friday was definitely a wild ride for IMNX!  
The company flew in the morning and blew out is previous all 
time high of $181.38.  IMNX reached an incredible $188.00!  
However, profit takers feasted.  They took home a lot of extra 
cash for the weekend and left a defiled IMNX actually in the 
negative by -$3.00 by the end of the day.  Hopefully you were 
able to set trailing stop losses and got stopped out for a nice 
chunk of change.  If not, don't get too upset.  We feel that 
IMNX is a strong company that will return to $188 and 
beyond the first chance it gets.  It is splitting on Friday 
March 26th.  Again, we want to emphasize the importance of 
stop losses as protection.  We do not recommend holding over
the actual split (7 out of 10 stocks go down).

News:  Some analysts recently feel that IMNX has a great shot 
at posting profits for 1999.  In 1998, IMNX made up substantial 
ground by generating a net income of $1.0 mln as opposed to 
a net loss of $15.8 mln in 1997 and a net loss of $53.6 mln 
in 1996.  IMNX feels that ENBREL sales for the treatment 
for advanced rheumatoid arthritis will be the key to its turn 

BUY CALL APR-175 IUU-DO OI= 87 at $15.88 SL=12.50
BUY CALL APR-180*IUU-DP OI= 64 at $12.88 SL=10.50
BUY CALL JUN-180 IUU-FP OI=  3 at $22.63 SL=17.50
Picked on March 14th at $168.25      PE= 0
Change since picked     +$10.13      52 week low =$ 47.88
Analysts Ratings      2-1-8-0-0      52 week high=$188.00
Last earnings 02/99 est -0.12   actual  0.26 surprise=+317% 
Next earnings 04-20 est -0.12   versus -0.23
Average Daily Volume = 475.7 K
Chart = http://quote.yahoo.com/q?s=IMNX&d=3m

AHP - American Home Products Corp. $65.81 (+0.43)(+5.88)(+0.00)

AHP discovers, develops, makes, and sells healthcare and 
agricultural products.  Over 60% of its sales are derived 
from pharmaceuticals.  Some of their products you might be 
familiar with are Advil, Robitussin, and Premarin (an estrogen-
replacement drug).  AHP also has subsidiaries like Cyanamid, 
Fort Dodge, Whitehall-Robins Healthcare and owns a majority 
stake in Immunex Corp.

Even though it finished with a small net gain, AHP really had 
an up and down week.  Positive announcements from the company 
caused the stock to jump to an all time high of $68.19 on 
Tuesday.  But some investors turned around and took profits- 
thus sending the stock right back down.  This scenario occurred 
all week resulting in an oscillating trading pattern.  However, 
when the trading pattern like this is broken, it is usually big 
in either direction.  This is where stop losses come in.  By 
setting your stop losses, you are protected in case the stock 
drops lower.  You are also able to take the chance that AHP will 
break out to the upside.  We feel AHP is more likely to head 
higher into blue skies due to its strong support at the $66 
level and are expecting another bounce back up (assuming 
the market can recover).

No new news.

BUY CALL APR-60 AHP-DL OI=5690 at $6.88 SL=5.25
BUY CALL APR-65*AHP-DM OI=2661 at $3.38 SL=1.75
BUY CALL JUL-65 AHP-GM OI=2110 at $6.13 SL=4.25
BUY CALL JUL-70 AHP-GN OI= 465 at $3.63 SL=1.75

Picked on March 14th at $65.38      PE= 36
Change since picked    +$ 0.43      52 week low =$43.75
Analysts Ratings     9-9-7-0-0      52 week high=$68.19
Last earnings 01/99 est 0.43   actual 0.44 surprise=+2% 
Next earnings 04-21 est 0.50   versus 0.49
Average Daily Volume = 2.63 Mln
Chart = http://quote.yahoo.com/q?s=AHP&d=3m

OMC - Omnicom Group Inc. $73.94 (+4.32)

Omnicom Group Inc. is the place to go for your advertising 
needs.  The company operates advertising agencies that plan, 
create, and produce advertising in various media.  To further 
assist customers, the company also supplies marketing 
consultation, market research, sales promotion, and public 
relations assistance. It is affiliated with BBDO Worldwide, 
DDB Needham, GGT Group, TBWA International Network, and 
Diversified Agency Services(DAS).  OMC receives approximately 
one third of its annual revenues from DAS.

Since way back in October, OMC has clearly taken the high road.  
We are adding the world's largest advertising organization 
this week as a call due to its strong fundamental outlook.  
Recent European acquisitions, expansion of their Internet 
capabilities, and the fact that the advertising sector remains 
strong should contribute to assisting OMC's progression higher.  
On Friday the company notched a new all time high of $74.13 in 
intraday trading and we feel there is much more in store for 
this ad agency.  

News:  Back on Wednesday, Merrill Lynch upgraded OMC to a 
near-term buy from accumulate.  On Thursday, Morgan Stanley 
followed suit by setting a 12 month price target of $82, up 
from $71.  Omnicom also expanded its services into the 
southeast with a new office in Nashville. 

BUY CALL APR-70 OMC-DN OI=217 at $6.13 SL=4.25
BUY CALL APR-75*OMC-DO OI=206 at $3.00 SL=1.50
BUY CALL JUL-75 OMC-GO OI=  2 at $6.63 SL=4.75 low OI!
Picked on March 21st at $73.94    PE= 43
Change since picked    +$ 0.00    52 week low =$37.00
Analysts Ratings     3-3-0-0-0    52 week high=$74.13
Last earnings   02/99 est 0.45    actual 0.55 surprise=+22% 
Next earnings   04-23 est 0.36    versus 0.31
Average Daily Volume = 561.7 k
Chart = http://quote.yahoo.com/q?s=OMC&d=3m

G - Gillette $62.00 (+0.00)(+2.31)(+3.75)

Gillette began in Boston in 1901 as the Gillette Safety Razor 
Company. It now develops, manufactures, and sells broadly 
diversified products, which include blades and razors, 
toiletries and cosmetics, stationery products, electric 
shavers, small household appliances, hair and oral care 
products, and alkaline batteries (Duracell is the big name). 
Its current big new product is the Mach 3 shaving system.

Gillette had a disappointing first quarter in which sales 
fell 3%. In the first 9 months, it also incurred reorganiza-
tion costs and expenses for the divestiture of Jafra Cosmetics, 
International, as well as sales declines associated with poor 
overseas economies. Over the years, however, this has been 
an outstanding company, and its stock price is beginning to 
reflect a return in investor confidence. G has a strong commit-
ment to developing new products and excellent potential to 
further expand sales of their products worldwide. In the 
beginning of March, G broke above its 10 dma and began 
climbing in price. On 3/9, Morgan Stanley Dean Witter started 
coverage with "outperform". On Friday, 3/12, JP Morgan 
upgraded G from "LT Buy" to an outright "Buy". It is currently 
sitting just a hair below the high it set back in early July: 
$62.63. If it can pass that magic number, it is blue skies 
ahead for G (assuming a positive market). 

Gillette is trying so hard to make it through resistance. 
On Thursday, it tied its old high, and on Friday, it made 
it to $62.88, 15 cents above the magic number. Unfortunately, 
the stock market sold off after the Dow 10,000 excitement, 
and G was unable to close above $62.63. Still, it showed 
incredible strength by losing only 6 cents on a down market 
day. Wait for it to break above resistance and hold.

BUY CALL APR -60*G-DL OI=2192 at $3.50 SL=1.75
BUY CALL JUN -60 G-FL OI=9721 at $5.50 SL=3.75
BUY CALL JUN -65 G-FM OI=3774 at $3.00 SL=1.50

Picked on March 14 at  $62.00      PE=64
Change since picked     +0.00      52 week low =35.31  
Analysts' ratings   6-8-4-0-1      52 week high=62.66
Last earnings on 12/98 est=.39     actual=.39 surprise=0%
Next earnings on  4-16 est=.25     versus=.23
Average daily volume = 3.04 mln
Chart = http://quote.yahoo.com/q?s=g=3m

WMT -  Wal-Mart $94.75 (-1.63)(+3.13)(+7.12)(+1.38)(+.75P4W)

Wal-Mart is the leading discount retailer in the world, with 
a presence in all 50 states, as well as Canada, Mexico, Asia,
Latin America, and Europe. In addition to discount department
stores, it operates the #2 grocery chain, behind Kroger's, 
and Sam's clubs, which is the #2 warehouse chain. This retail 
giant's market capitalization is $182.3 billion.

We had been playing WMT as a slow but steady momentum stock 
with strong fundamentals, and as a split candidate. On 
Thursday, 3-4, WMT announced a 2-for-1 stock split, a 29% 
increase in its dividend, and an expansion in its share 
repurchase program by $1.2 billion to $2 billion. What more 
could investors ask for? After an outstanding fourth quarter, 
Wal-Mart is continuing with strong numbers in the current 
quarter, too. February net sales were up 17.7% year over year. 
And same store sales increased 10.3% over last year. This 
stock does not move the way the Internets do, but it not as 
risky, either.

On Thursday, Wal-Mart set a new high of $98.38, but it sold 
off sharply on Friday along with the market. It closed down 
$3.44 on the day. On Wednesday, WMT bottomed at $94.69 and 
Friday found support at $94.75. This might be a good time to 
pick up options on a dip, but please confirm upward movement 
before jumping in! WMT splits on April 19. 
BUY CALL APR-90  WMT-DR OI=2829 at $ 7.38 SL= 6.25
BUY CALL APR-95* WMT-DS OI=3663 at $ 4.38 SL= 3.25
BUY CALL JUN-100 WMT-FT OI=1196 at $ 5.25 SL= 4.00

Picked on Jan 26th at $83.56    PE = 48  
Change since picked   +11.19    52 week low= $48.19
Analysts' ratings 7-11-4-0-0    52 week high=$97.31
Last earnings on 12/98 est=.66  actual=.70  
Next earnings on 5-12  est=.43  versus=.37
Average daily volume = 3.16 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m

GE -  General Electric $112.00 (+4.62)(+1.38)(+5.69)

GE might not call itself a conglomerate, but it is. Its 14 
divisions make airplane engines, appliances, lighting, 
medical systems, plastics, power systems, and also include 
NBC, financial services, and electrical distribution and 
control. It is one of the largest and most diversified 
industrial corporations in the world.

Since the beginning of January, GE has tried 3 times to break 
through resistance at $105.00. Each time it hit that magic 
number, it pulled back, forming a triple top. On March 9 it 
finally broke out and hit $107.19 before making a new closing 
high of $106.00. Volume was nearly 50% higher than normal. 
This is a very bullish sign for the stock, and we expect it 
to make new highs from here. It is now well above its 10 dma, 
which should provide support, and it has some support below 
that around $108.

This stock is electrified! On Friday, when much of the rest 
of market pulled back from the Dow 10,000 euphoria, GE went 
on to set a new high of $113.81 and to close at a record 
$112.00. The $2.00 gain was on more than double its normal 
volume. The media is full of positive comments about GE and 
its momentum. Market permitting, GE will continue to shine.

BUY CALL APR-105 GE-DA OI=2972 at $8.62 SL=6.50 premium=1.62
BUY CALL APR-110*GE-DB OI=5701 at $5.00 SL=3.25 ITM $2.00
BUY CALL APR-115 GE-DC OI=1876 at $2.38 SL=1.00
BUY CALL JUN-110 GE-FB OI=5016 at $8.75 SL=6.75

Picked on March 9 at   $106.00      PE=38
Change since picked      +6.00      52 week low=  69.00
Analysts' ratings    8-8-2-0-0      52 week high=110.31
Last earnings 12-98   est=$.80   actual=.80 surprise 0%
Next earnings on 4-08 est=$.65   versus=.57 
Average daily volume = 4.58 mln
Chart = http://quote.yahoo.com/q?s=ge=3m

LOW - Lowe's Companies, Inc. $63.75 (-1.13)(+2.88)(+2.69)(+2.25)

LOW is the #2 US home improvement chain, after The Home Depot,
and has more than 474 stores in 26 states.  LOW sells a broad
range of building supplies, hardware, home decor and garden
products, appliances, lumber, tools, paint, and consumer
electronics.  LOW helps customers design kitchens and even
installs many of its products, including doors, flooring, and
cabinets.  LOW continues to expand from its original eastern US
stronghold and is adding more stores in the South, Midwest, and
West.  Late last year it announced the acquisition of Eagle
Hardware a regional home improvement chain with 35 stores in
the West.

LOW is hovering right above its 10,15, and 30 day moving 
averages.  Low edged lower early in the week but had a "big 
gainer" day on Thursday by adding +2.88.  However, Friday's 
volatility set LOW slightly back again.  Even though LOW 
culminated the week with a loss of -$1.19, we feel this is a
minor pause necessary before the company can challenge its all 
time high of $66.44 set not too long ago on 3/11.  Wait for the 
upward confirmation.

No new news. 

BUY CALL APR-60 LOW-DL OI=1500 at $5.25 SL=3.75
BUY CALL APR-65*LOW-DM OI= 633 at $2.44 SL=1.25
BUY CALL JUL-65 LOW-GM OI= 357 at $5.75 SL=4.25

Picked on Jan 31st at $58.31   PE=47
Change since picked    +5.44   52 week low =$23.88
Analysts Ratings  6-13-3-0-0   52 week high=$66.44
Last earnings  01/99 est=.27   actual=.30
Next earnings  05-18 est=.33   versus=.27
Average Daily Volume = 1.5 mln
Chart = http://quote.yahoo.com/q?s=LOW&d=3m

Put plays can be very profitable but have a larger risk than
call plays. When a stock is falling the entire investment
community (except the shorts) is hoping it will reverse and
start back up. The company management is also doing everything
they can to shore up their stock price. The company issues
press releases, brokers talk it up, analysts try to put a
positive spin on everything. Then of course there is the death
knell, the "buy recommendation" simply because the price has
dropped to some level that analysts feel attractive again. 
Buyers who like the stock wait until it appears a bottom has
been reached and then jump on it in a feeding frenzy. They may
already have a large position and are averaging down. Many
factors can stop a free falling stock in mid drop.

Recommended Puts 

LXK - Lexmark Intl. $88.50 (+2.12)(-8.87)(-7.94)

Lexmark makes laser and ink-jet printers from network to 
desktop, and home to business use.  Supplies for same make 
up 20% of the business.  Lexmark uses dealers in 15,000 
locations throughout 150 countries to market its products.
That giant sucking sound you hear is Lexmark inhaling canal 
water.  As goes the PC business, it's assumed so goes the 
peripheral business, including printers.  Add to that stiff 
competition from Canon, Epson and HP, margin/profit gets 
squeezed as these manufacturers duke it out for market 
share.  March's news (sparse) talks only of product 
enhancements and rollouts; nothing about earnings or 
revenues.  The technical chart is showing lower highs and 
lower lows on significantly increased volume.  It has the 
appearance of "distribution".  Furthermore, it violated its 
50 DMA at the beginning of March and can't get back above 
it.  Next support appears to be about $80 last seen in 
December.  Interesting note:  Friday, they filed their 
shareholders meeting proxy notice (DEF 14A) which contained 
the following.  "4. To approve an amendment to the Third 
Restated Certificate of Incorporation that would increase 
the number of authorized shares of Class A Common Stock 
from 160 million to 450 million".  Could they be thinking 
of a stock split (you know, just in case the stock goes 
up)?  We don't think so, but maybe they hope it will 
reverse the current trend.  As always, confirm market 
direction before playing.

BUY PUT APR-90 LXK-PR OI= 56 at $6.88 SL=5.25
BUY PUT APR-85*LXK-PQ OI=101 at $4.13 SL=2.75

Average daily volume = 467K

Chart = http://quote.yahoo.com/q?s=LXK&d=3m


CGX -Consolidated Graphics $47.50 (-6.00)(-4.75)(-2.50)

CGX is a printing company aggregator with over 50 regional 
printing companies purchased since 1985.  They print mostly 
brochures and catalogues for over 8000 customers.  

For-warned is for-armed.  We offer this as a technical 
momentum play only.  These shares (same for the options) 
are thinly traded, averaging only 65,000 shares per day.  
CGX has an awful looking technical chart.  Except for a one 
and one half week period in February, CGX has been headed 
downhill for the last 2 months.  It refuses to remain above 
its 13 DMA -- very bearish.  There is weak support at $45, 
but it's downhill to $32 from there.  The only news 
available comes from announcements of more acquisitions.  
For a company with $693 million in market cap, they don't 
have much cash ($11 million) and are likely using shares 
and debt (debt/equity=76%) to finance acquisitions.  The 
safest way to play CGX is to wait for a move below $45 
before starting a play.  Don't use a market order as the 
spreads will widen and you will likely pay too much.  

BUY PUT APR-50 CGX-PJ OI=32 at $4.75 SL=3.25,thinly traded
BUY PUT*APR-45 CGX-PI OI=50 at $1.81 SL=0.75,thinly traded

Average daily volume = 65K

Chart = http://quote.yahoo.com/q?s=CGX&d=3m


CPQ - CPQ - Compaq Computer Corp $30.75 (+0.50)(-4.00)

Compaq is the #1 PC maker in the world and stands only behind
IBM and HWP as a leading computer firm.  Primarily they
develop and market hardware and software solutions to the
business sector, but also cater to home users, schools, and
the government.  They offer a slew of other technology 
services such as their AltaVista internet search engine.

The strength of 1Q earnings for the computer makers are being
questioned by analysts.  It started Thursday with the 
depressing report on CPQ by Piper Jaffrey and Friday, the 
target was IBM.  WallStreet murmured concerns that they too 
could fall short of the estimates.  On this news, CPQ 
followed suit and fell $1.13 on heavy trading. Besides poor 
1Q expectations, the lawsuits against Compaq and the 
unanswered PC sales question are also still looming in the 
minds of investors. CPQ closed just above its intraday 
low of $30 which seems to be its resistance.  We're looking 
for the stock to dip near its bottom which appears to be 
between $25 and $22. Have stops in place to protect your 

BUY PUT APR-27.50 CPQ-PY OI= 6265 at $0.88 SL=0.00
BUY PUT APR-30.00*CPQ-PF OI=21617 at $1.69 SL=0.75

Chart = http://quote.yahoo.com/q?s=cpq&d=3m


LHSG - LHS Group $37.63 (+0.50)(-3.56)(-2.31)(P4W -3.88)

LHSG is a telephone billing and customer service software 
and solutions provider.  They help telecoms manage their 
daily operations and billing, while handling multiple 
languages and currencies in over 50 countries.

Careful everyone.  We may have found a bottom here.  
Honestly, it's tough for a stock to go down when the rest 
of the market is moving up.  Even though LHSG closed near 
its low of the day Friday, volume was weak indicating 
investors are comfortable with the price.  This happened on 
a day when market-wide volume surged and the indices were 
off substantially.  We'll have to wait for more downward 
reversal before starting any new plays.  There was no news 
to be found last week.  All the bad news is out and 
accounted for.  Keep your stops set tight in case the 
market takes off 

BUY PUT APR-40*QLH-PH OI=1130 at $4.38 SL=3.00
BUY PUT APR-35 QLH-PG OI= 122 at $2.00 SL=1.00

Average daily volume = 144K
Chart = http://quote.yahoo.com/q?s=LHSG&d=3m


BMCS - BMCS - BMC Software $34.00 (-2.31)(-.38)(-2.69)

BMC Software provides systems management software solutions 
for host mainframe and distributed information systems, and
also offers maintenance, enhancement & support services 
The distributed systems and application management markets 
in which the Company operates are far more crowded and
competitive than its traditional mainframe systems 
management markets.

A leader in enterprise-level software was downgraded by
Soundview in October 98 and by Morgan Stanley in December. 
The Company has experienced long development cycles
and product delays in the past, particularly with some of 
its distributed systems products, and expects to have 
delays in the future. Delays in new mainframe or 
distributed systems product introductions or less-than-
anticipated market acceptance of these new products are 
possible and would have an adverse effect on the Company's 
revenues and earnings.  The crater gets deeper.  BMCS shed 
$2 on Friday alone, closing just off its low of the day 
(and the year too for that matter). Even market strength 
may not raise this sinking ship since its technical chart 
is extremely negative as it appears to bounce down from 
its 13 DMA--very bearish.  However, caution is necessary.
If the overall market heads south or shows any weakness,
experienced traders will notice, that sometimes, when the
broader market turns south, investors will pile money 
into those issues that are already beat up.  It conflicts
with common sense, but it does happen.

BUY PUT APR-40 BCQ-PH OI=2524 at $7.00 SL= 5.25 ITM $6
BUY PUT APR-35*BCQ-PG OI= 440 at $3.13 SL= 2.00

Chart - http://quote.yahoo.com/q?s=bmcs&D=3m


SBUX - Starbucks Corp $56.06 (-4.00)(+1.31)(+5.87)(+4.50)

Starbucks is the #1 specialty retailer of coffee in the US.  
It operates more than 2,000 shops across the United States, 
Asia, Canada, and the UK.  They can be found in places ranging 
from office buildings and airports to shopping centers and 
supermarkets.  Starbucks sells a wide variety of specially 
blended coffees and pastries as well as the beans, coffee 
grinders, and coffee makers.  It has a deal with Dreyer's to 
make coffee ice cream and also has bonded with PepsiCo to make
Frappuccino, a bottled coffee drink.

Starbucks made a huge surge into blue sky territory the week 
before it split.  We had been playing it as a call during that 
time.  However, the actual week of the split was a 
disappointment as the stock leveled off on a low trade volume.  
When it split on Friday, profit takers sold like mad and the 
stock made its biggest one day move in weeks.  It dumped -$4.50 
of profits down the drain.  This could be the tip of the iceberg.  
7 out of 10 splitters suffer from post split depression.  We 
feel it is time to play Starbucks for the post split depression
BUY PUT APR-60 SQX-PL OI=134 at $5.88 SL=4.25 ITM
BUY PUT APR-55*SQX-PK OI=256 at $3.13 SL=1.50

Chart = http://quote.yahoo.com/q?s=sbux&d=3m


GIS - General Mills $74.00 (-4.56)

General Mills is the #2 cereal maker in the US behind 
Kellogg.  You will recognize many of their brand names
from cereals to yogurts to baking mixes (Cheerios,
Yoplait, Betty Crocker, and Bisquick).  These are just 
a few of their products but they are best known for their
cereals.  They have been working on improving their 
international operations with joint ventures with other
major food brand names including Nestle, PepsiCo, and 

GIS has been in a downtrend is just $2.00 from its 200-dma.
GIS announced earnings in line with estimates last Wednesday.
Though earnings did increase, there are concerns about the
fierce competition in the cereal business.  Some analysts
are worried about shrinking margins for GIS.  Be wary of a
bounce off the 200-dma.  If GIS breaks this level, it could
reach its lows in the $50's reached last summer.  GIS closed
right at its low of the day on Friday.

BUY PUT APR-80*GIS-PP OI=119 at $6.75 SL=4.75 ITM $6, prem=$.75
BUY PUT APR-75 GIS-PO OI= 43 at $2.56 SL=1.25 ITM $1.00
-not much activity on APR-70s yet.

Chart = http://quote.yahoo.com/q?s=GIS&d=3m


NSOL - Network Solutions $288.00 (+66.00)

Network Solutions has a monopoly on Internet domain names.
They are the exclusive supplier for address ending in
.com, .org, .net, or .edu.  With the boom of the Internet,
NSOL has registered over 3 million addresses.  While
85% of their revenues come from registration fees their
exclusive contract with our government, which was to end
in 1998, has been temporarily extended.

HIGH RISK PLAY! NSOL has shot up extremely fast and high.  
We suggest buying puts before closing bell on Tuesday (3/23).  
If NSOL acts anything like CNET, it will take a nice dip after
it splits.  Its split is reflected in the price on the 24th.
Since these Internets move so quickly, this is an extremely
HIGH RISK play, but with risk can come reward.  NSOL has 
gone from $155 to $288 in just over 2 trading weeks.  For 
those that attended the seminar, Jim called this a gravity
play.  This suggests that with such a quick vertical move,
gravity eventually takes place.  

BUY PUT APRIL-280 JNU-PP OI=127 at $46.25 SL=35.00
BUY PUT APRIL-290 JNU-PR OI= 51 at $51.63 SL=40.00
-these are likely to drop in price as NSOL climbs
through Monday and Tuesday.

Chart = http://quote.yahoo.com/q?s=NSOL&d=3m


IBM - Intl Business Machines Corp $168.56 (-9.44)

IBM develops, manufactures, and sells advanced technology 
processing products.  They are the worlds top provider of 
computer hardware including PCs, mainframes, and network 
servers. IBM is also an industry leader in software and 
peripherals, second only to Microsoft.  The company owns 
software pioneer Lotus development, maker of Lotus Notes.

On Wednesday, the "Big Blue" began its sharp decline on 
whispers of negative 1Q earnings.  The speculation about 
current hardware demand, slippage in the company's storage 
systems, and rumors of a potential relationship with EMC 
heightened investor's fears of a 1Q revenue shortfall.  
Earnings are due 4-20.  The decline picked up its true 
momentum in mid-afternoon trading on Friday after Morgan 
Stanley's, Thomas Kraemer, cut its target price on IBM to 
$195 from $210, yet maintained its "out performance" rating. A 
cautionary remark also came from Lehman Brothers who said IBM 
would "be a challenge from a revenue perspective".  On the 
other side of the chip, SoundView Technology Group argued the
stock's decline is more closely tied to "Triple Witching" week.
Nonetheless, IBM plummeted another 7 points on the downgrade 
and comments; the stock lost a total of -9.06 (5.1%) for the 
day to close at $168.56. We expect IBM may gap down again on 
Monday.  Be warned, this play is a quickie - get in and out
fast!  This is an aggressive play the stock will be moving 

BUY PUT APR-160 IBM-PL OI=3960 at $3.38 SL=1.75
BUY PUT APR-165*IBM-PM OI=2745 at $5.25 SL=3.50
BUY PUT APR-170 IBM-PN OI=4619 at $7.50 SL=5.75

Chart = http://quote.yahoo.com/q?s=ibm&d=3m


NEON - New Era of Networks, Inc $59.00 (-11.63)

The company develops, markets, and supports application 
integration software for updating outdated computer systems.  
Its flagship is NEOnet which integrates a variety of 
software applications enabling data transmission across 
networks and the internet.  NEON's customers include blue
chip companies like Aetna, Merrill Lynch, and Xerox.  They 
also offer their clients online support, installation, and 
consulting services.

There's an old saying that what goes up must come down.  
NEON has been in an uptrend since early October with no 
significant periods of consolidation.  The stock just kept 
going up.  Well the rubber has met the road and it appears 
NEON is now reversing.  For how long is the million dollar 
question.  The MACD shows a down tick and NEON has crossed 
over both its 10 and 21dma.  The positive news on Tuesday 
about the joint development and market relationship between 
New Era and Forte Software didn't seem to impress the traders. 
They wanted to cash in on some profits. The following day the 
stock began its descent and on Thursday NEON lost 5+ more 
points.  Scuttlebutt came on Friday causing the stock to 
tumble down another -9.13. The volume was at an incredible 
3.72 mln in comparison to its ADV of 561.2 K. Investor 
relations spokeswoman, Cynthia King, denied all rumors that
New Era had lost a major client stating no basis on fact - 
word on the Street was that they lost JP Morgan.  Plus, 
there is slight concern that NEON may miss 1Q earnings 
estimates and also, get some real competition from TSI Intl 
Software who just acquired privately held Braid Group.  For 
the most part, analysts remain positive on the stock and 
believe these are excuses for overdue profit-taking. Keep in 
mind, this Nasdaq stock is also riding on the bearish tail 
of IBM.  

BUY PUT APR-55*QNO-PK OI=183 at $3.88 SL=2.25
BUY PUT APR-60 QNO-PL OI= 84 at $6.25 SL=4.50

Chart = http://quote.yahoo.com/q?s=neon&d=3m


The Option Investor Newsletter            3-21-99
Sunday                5  of  6

Where to from here?

Friday, March 19

The Dow fell hard on Friday as Wall Street bears again spoiled the
blue-chip index's bid to close above the 10,000 milestone. The
final tally was a 94 point loss, leaving the average well short at
9903 even after an early run peaked at 10085. The Nasdaq index of
technology stocks was also lower, off 41 points at 2421. In the
broader market, declining issues beat advances 18 to 11 on active
volume of 917 million shares on the NYSE.

Thursday's new plays (positions/prices):

EGGS  APR17C/APR20C    $1.50  Debit
BTC   MAY15C/APR17C    $1.75  Debit
BTC   MAY15C/APR15C    $0.75  Debit
BPA   APR90C/APR95C    $3.75  Debit
FDX   JUL100C/APR100C  $5.75  Debit

Portfolio plays:

Another exciting strike day for the spreads portfolio! The first
bomb occured (as expected) after the CATP announcement of lower
than expected earnings. The stock opened about $9 lower and only
rebounded about $1 during the day. Our long-term option faded to
almost nothing and we decided to close the play rather than chase
the stock for the next few months on the way back up. Then more
excitement came with the ATHM position, a credit spread that was
about $5.00 OTM (very safe?) when the day started. Around 1 p.m.
the stock took off, climbing well past the sold strike and taking
our profits with it! A sell-off quickly followed, allowing us to
exit the play bruised but not beaten with only a small loss. SAPE
fell back early and eventually finished right at our sold strike
making that short-strangle one of our most profitable plays this
week. GE and ALLC were also profitable but they were well outside
the sold positions and had to be bought back during the day! Most
of our long-term plays were rolled forward and some were adjusted
to higher strikes. These positions will initially have smaller
profits (if any) but if the stock continues to move slowly in the
appropriate direction (or remain range-bound), the long-term
position will eventually catch up. Some of our LEAP plays are now
very profitable and we will probably drop these from the portfolio
to reduce the tracking workload. The rest of the current plays and
any other closed positions are listed in the monthly summary.

If you have questions or comments about spreads or combination
plays, please send them to ray@OptionInvestor.com

Good Luck!
Stock   Pick     Last     Position    Credit  Cost   G/L   Status

AAMB   $10.25   $8.94    MAR15C/12C   $0.18  $0.00  $0.18  Closed
AAS    $76.93   $72.38   MAR85C/80C   $0.87  $0.00  $0.87  Closed
ACAI   $31.62   $28.00   MAR40C/35C   $0.56  $0.00  $0.56  Closed
ATHM   $115.56  $133.81  MAR135C/130C $0.75  $0.87 ($0.12) Closed
BGEN   $96.12   $112.13  MAR80P/85P   $0.75  $0.00  $0.75  Closed
CAH    $73.93   $72.38   MAR85C/80C   $0.62  $0.00  $0.62  Closed
DLP    $32.31   $34.69   MAR25P/30P   $0.50  $0.00  $0.62  Closed
INTC   $137.19  $119.00  MAR115P/120P $0.75  $0.75  $0.00  Closed
MNMD   $85.25   $93.13   MAR115C/110C $0.31  $0.00  $0.31  Closed
ONSL   $32.56   $37.75   MAR22P/25P   $0.38  $0.00  $0.38  Closed
RMBS   $74.81   $70.88   MAR60P/65P   $1.00  $0.00  $1.00  Closed
SAPE   $63.38   $65.00   MAR75C/70C   $0.50  $0.00  $0.50  Closed

Credit spreads are profitable if both positions remain OTM until
expiration. The cost-to-close price can be used to compare the
initial opening credit to the current spread value.
Stock   Pick    Last      Position   Debit  Value   G/L    Status

ADI    $32.38  $28.94  MAR35C/MAR30C $0.06  $0.06  $0.06   Closed
AZPN   $17.06  $10.13  MAR15C/MAR12C $1.25  $0.00 ($1.25)  Closed
BTC    $16.75  $16.00  MAY15C/APR17C $1.75   New    Play   Open
BTC    $16.75  $16.00  MAY15C/APR15C $0.75   New    Play   Open
CNXT   $17.00  $23.50  APR17C/MAR17C $0.56  $1.25  $0.68   Closed
CPQ    $42.68  $30.75  APR45C/MAR45C $0.00  $0.87  $0.87   Closed
CTXS   $89.00  $77.75  MAR90C/FEB95C $4.87  $4.50 ($0.37)  Closed
GLW    $48.81  $59.00  MAR50C/FEB50C $1.12  $5.00  $3.87   Closed
HNZ    $54.56  $49.13  MAR55C/FEB55C $4.50  $4.25 ($0.25)  Closed
INTC   $137.19 $119.00   MAR135C-S   $3.75  $2.87 ($0.87)  Closed
MTC    $46.19  $48.63  APR45C/MAR45C $5.12  $5.50  $0.38   Closed
OMPT   $14.06  $11.31  MAR15C/MAR12C $0.75  $0.00 ($0.75)  Closed
PHB    $24.43  $37.75  APR25C/MAR30C $4.50  $4.87  $0.37   Closed
PLCM   $26.75  $13.94     MAR25C     $0.87  $1.12  $0.25   Closed
PTEK   $11.38  $9.88   MAR12C/MAR10C $0.50  $0.75  $0.25   Closed
UK     $41.50  $44.63  APR42C/MAR42C $0.75  $1.62  $0.87   Closed
USAI   $41.62  $39.50  MAR40C/FEB40C $1.75  $3.00  $1.25   Closed
Long-term plays:
CATP  $30.12  $11.38   JUN30C/MAR30C $3.00  $0.25 ($2.75)  Closed
CD    $19.93  $17.00   LJAN20/APR20C $2.62  $2.75  $0.12   Open
CIEN  $22.44  $23.75   JUL20C/APR22C $0.62  $3.38  $2.62   Open
DIS   $38.00  $35.06   LJAN40/APR35C $0.75  $2.00  $1.25   Open
FDX   $98.12  $96.00   JUL100C/A100C $5.75   New    Play   Open
HAL   $31.00  $36.88   LJAN30/APR35C $5.00  $7.25  $2.25   Roll-Up
HD    $58.43  $63.25   LJAN60/APR65C $9.50  $9.50  $0.00   Roll-Up
HUM   $19.50  $18.81   MAY20C/APR20C $0.12  $0.50  $0.38   Open
ITVU  $22.38  $33.38   JUN22C/MAR22C $3.43  $6.50  $2.56   Closed
ITWO  $34.87  $26.00   MAY35C/APR30C $1.62  $0.12 ($1.50)  Open
JNJ   $86.63  $91.06   LJAN85/APR85C $6.50  $6.50  $0.00   Roll-Up
LEH   $57.93  $59.31   LJAN60/APR60C $6.50  $7.75  $1.25   Open
NOVL  $18.19  $26.19   MAY17C/APR22C $2.00  $4.50  $2.50   Open
NWAC  $25.00  $27.50   JUN25C/APR25C($0.25) $1.25  $1.50   Open
OXHP  $20.06  $17.81   MAY20C/APR20C($1.06) $0.62  $1.68   Open
PCS   $21.81  $43.00   MAY22C/MAR25C $1.00  $2.38  $1.38   Closed
SEPR  $99.62  $129.88  LJAN100/A110C $22.00 $23.00 $1.00   Open
SGP   $53.88  $58.38   LJAN55/APR55C $4.87  $5.12  $0.25   Open
SKYT  $26.38  $16.38   JUN25C/APR20C $0.00 ($0.62)($0.62)  Open
SUNW  $94.50  $110.38  LJAN100/A100C $7.12  $14.87 $6.75   Open
UAL   $65.38  $74.50   LJAN65/APR70C $13.00 $11.00($2.00)  Roll-Up
WCOM  $74.25  $91.50   LJAN75APR80C  $8.62  $12.00 $3.38   Roll-Up

The calendar (or time spread) is profitable if the value of the
position exceeds the initial debit (or cost-basis) at the end of
the expiration period for the long position. However, because we
track the plays based on the current closing cost/value, the gains
for time spreads will rarely be reflected until the play closes.
Each month, as we sell a new call against the long position, the
net cost should decline or the position value should increase.
			    - DEBIT SPREADS -
Stock  Pick    Last     Position    Debit  Value   G/L   Status

AMP   $51.06  $55.00   MAR45C/50C   $3.75  $4.87  $1.12  Closed
BDX   $39.50  $35.31   APR30C/40C   $7.50  $6.00 ($1.50) Closed
BFI   $33.75  $38.63   APR30C/35C   $2.75  $4.75  $2.00  Closed
BPA   $99.75  $96.31   APR90C/95C   $3.75   New   Play   Open
CKH   $39.38  $46.25   MAR45P/40P   $3.43  $3.62  $0.19  Closed
COOL  $21.38  $20.75   APR17C/20C   $1.25  $1.25  $0.00  Open
DELL  $81.75  $40.25   MAR75C/80C   $2.87  $3.87  $1.00  Closed
EGRP  $48.25  $60.50   MAR40P/35P   $1.75  $2.25  $0.50  Closed
EGRP  $48.25  $60.50   MAR60C/65C   $1.25  $1.12 ($0.12) Closed
EGGS  $21.87  $19.69   APR17C/20C   $1.50   New   Play   Open
FORE  $13.12  $17.00   APR10C/12C   $1.50  $2.00  $0.50  Open
IBM  $185.50  $168.56 MAR175C/185C  $5.00  $6.00  $1.00  Closed
IBM  $185.50  $168.56 MAR175C/185C  $3.00  $6.00  $1.00  Closed
KSU   $45.75  $49.94   MAR30C/40C   $8.25  $9.87  $1.62  Closed
LUV   $29.06  $32.50   MAR25C/30C   $3.12  $4.50  $1.38  Closed
MCD   $79.06  $43.63   MAR75C/80C   $3.12  $4.25  $1.12  Closed
MENT  $14.25  $12.69   MAR12C/15C   $1.00  $1.50  $0.50  Closed
NXTL  $30.93  $33.81   MAR35P/30P   $3.50  $4.12  $0.62  Closed
PRD   $21.82  $20.63   APR17C/20C   $1.75  $1.38 ($0.38) Open
RHD   $17.68  $15.88  MAR15C/MAR17C $1.12  $1.38  $0.25  Closed
RNWK  $62.00  $141.75  MAR65C/70C   $2.25  $4.50  $2.25  Closed
RNWK  $62.00  $141.75  MAR55P/50P   $1.62  $0.12 ($1.50) Closed
T     $91.93  $79.63   MAR95C/85C   $5.87  $3.81 ($2.06) Closed
ZD    $25.50  $24.88   APR17C/22C   $3.38  $3.50  $0.12  Open

A debit-spread is profitable if the value of the position exceeds
the initial cost of the spread when the play is closed. However,
because we track plays based on the current cost/value, potential
gains may not be reflected until both positions are closed.
Stock   Pick   Last      Position    Debit  Value    G/L   Status

GTSG  $63.43  $63.81  APR65C/APR60P  $10.00 $12.50  $2.50  Closed
ICST  $16.62  $16.38  APR17C/APR15P  $2.00  $1.25  ($0.75) Open
LSI   $27.06  $28.00  APR30C/APR25P  $3.25  $2.00  ($1.25) Open
PMS   $37.62  $32.88  MAY40C/MAY35P  $4.62  $4.00  ($0.62) Open
TECD  $22.93  $15.81  MAR22C/MAR22P  $0.00  $0.75   $0.75  Closed
TSM   $19.00  $26.13  APR17P/APR20C  $0.38  $1.12   $0.75  Closed

Debit Butterflies:

BSX   $27.43  $41.50  MAY22C/25C/27C $0.50  $0.38  ($0.12) Closed
HWP   $71.19  $70.88  APR65C/70C/75C $1.38  $1.38   $0.00  Open
PG    $90.75  $93.63  APR80C/85C/90C $0.75  $0.75   $0.00  Open
QTRN  $49.50  $39.00  MAR45C & 55C   $3.38  $3.50   $0.12  Closed
UK    $40.25  $44.63  APR37C/42C/47C $1.00  $1.50   $0.50  Open

A debit-straddle is profitable when the value of the position
exceeds the initial cost of the spread.
Stock   Pick   Last      Position     Credit  Cost   G/L   Status

ALLC  $17.62  $18.00   MAR17P/MAR17C  $1.75  $0.50  $1.25  Closed
GE    $100.62 $112.00  MAR110C/MAR90P $1.62  $1.50  $0.12  Closed
LU    $101.00 $100.75  MAR120C/MAR85P $2.31  $0.00  $2.31  Closed
SAPE  $63.38  $65.00   MAR65C/MAR60P  $2.93  $0.25  $2.68  Closed
UAL   $65.00  $74.50   MAR60P/MAR70C  $2.62  $2.50  $0.12  Closed

Credit Butterflies:

AAPL  $37.19  $33.50   APR32P/35P     $1.00  $1.31 ($0.31)  Open
AAPL  $37.19  $33.50   APR37C/35C     $1.12  $0.81  $0.19   Open

A credit-straddle is profitable if the cost to close the position
is less than the initial credit from the spread.
				- NEW PLAYS -
BR - Burlington Resources  $40.25     *** Another Takeover? ***

Burlington is the largest independent oil and gas company in the
US, based on its domestic proved gas reserves. The company has
international proved reserves of nearly eight trillion cubic feet
of natural gas equivalent. Its subsidiaries, Burlington Resources
Oil & Gas and Louisiana Land and Exploration, produce mostly in
the US through four units. The San Juan unit operates in New
Mexico and Colorado; two units concentrate on the Gulf of Mexico;
and the mid-continent unit has wells in Montana, North Dakota,
Oklahoma, South Dakota, Texas, and Wyoming. The international
unit has operations in Algeria, Venezuela, and the East Irish Sea.

It's nice that oil and gas prices are moving higher but the basis
for this play is the extreme interest in call options. Implied
volatility on the April options spiked on Friday morning amid talk
that it was the target of a takeover. Some speculated that Texaco
might be interested but neither company commented on the activity.
Trading volume in the options has been above average and experts
agree that the consolidation in the industry make this company a
viable target. We like the disparity in the April $40 calls and
the bullish chart indications.

PLAY (speculative/debit spread):

BUY  CALL APR-37.50 BR-DU OI=29  A=$4.00
SELL CALL APR-40.00 BR-DH OI=414 B=$2.68
INITIAL NET DEBIT TARGET=$1.31 ROI(max)=90% B/E=$38.81

Chart = http://quote.yahoo.com/q?s=BR&d=3m
NSOL - Network Solutions  $288.00     *** To the Moon? ***

Network Solutions is the exclusive registrar of Internet addresses
ending in domains .com, .org, .net, and .edu. The company, which
earns more than 85% of its sales from registration services, has
registered over three million addresses. Network Solutions also
provides intranet development and network security services. The
company's exclusive registration contract with the US government,
which was set to expire in 1998, has been extended while the new
transition to a not-for-profit administrative body and an openly
competitive registration system is set.

The company acknowledged Thursday the recent court decision by
a U.S. District judge as affirmation of its pioneering role in the
development of domain name registration services in its agreement
with the federal government. The judge ruled in favor of NSOL and
the National Science Foundation ending a two-year lawsuit filed
by PG Media, Inc. Two other courts have affirmed NSOL's domain
name registration activity under the authority of its cooperative
agreement. They all agree that while Network Solutions is not a
government agency, it is immune from antitrust liability.

The decision further elevates NSOL to the top of the "Internet"
heap and the recent bullish activity make both of these plays
fairly conservative. (Just don't "leg" into the debit spread!)

PLAY (conservative/credit spread):

BUY  PUT APR-170 JNQ-PN OI=131 A=$5.38
SELL PUT APR-180 JNQ-PP OI=134 B=$7.00

PLAY (conservative/debit spread):

BUY  CALL APR-200 JNQ-DT OI=523 A=$100.87
SELL CALL APR-210 JNQ-DB OI=475 B=$93.12
INITIAL NET DEBIT TARGET=$7.50 ROI(max)=33% B/E=$207.50

Chart = http://quote.yahoo.com/q?s=NSOL&d=3m
FFD - Fairfield Communities  $10.81     *** Strange Activity ***

Fairfield Communities offers vacationers a time share at resorts
in 11 states and the Bahamas. These resorts have oceanfront access, 
mountain views and access to vacation destinations. The resorts
are open to the public, but the firm caters to vacation ownership
interest customers, who buy points and can apply them toward the
purchase of time at any of its full-service resorts. Some of FFD's
holdings were recently picked up in a merger with Vacation Break

FFD stock rallied on heavy volume Friday afternoon as investors
speculated the time-share company will be taken over even as one
analyst cast doubt on the rumor. The BT Alex. Brown analyst said
he didn't think the companies that would mix with FFD would be
willing to pay much of a premium above where it is now. Without
regard to his statement, the stock added almost $2 on trading of
1.4 million shares.

Fairfield options were also active and a Jefferies & Co analyst
noted the FFD rumor has made the rounds in the past. He said a
large hotel chain buying a company that organizes time-shares
"makes sense." The chart is fairly bullish from a short term
perspective but resistance and the previous trading range exist
near the current price. The conservative spread should profit
without any news but could lose on a "buy-out" if it occurs in
the next few weeks. The aggressive spread is for those who like
to gamble a little...

PLAY (conservative/neutral time spread):

BUY  CALL JUN-10 FFD-FB OI=160 A=$2.75
SELL CALL APR-10 FFD-DB OI=452 B=$2.00

PLAY (aggressive/ratio time spread):

BUY  (10) CALLS JUN-12.50 FFD-FV OI=94  A=$1.25
SELL (5)  CALLS APR-10.00 FFD-DB OI=452 B=$2.00

Chart = http://quote.yahoo.com/q?s=FFD&d=3m
MSFT - Microsoft Corp. $171.19     *** Disparity Play ***

Microsoft is the world's #1 software company with products like
Windows 98, Excel spreadsheets, Word processing, Powerpoint tools,
and Encarta reference works. The Microsoft Network provides online
content, and its Internet Explorer browser is battling Netscape
Navigator for market share. With NBC, the company operates cable
news channel MSNBC. It also provides free e-mail, "Hotmail" and
other services.

Microsoft just launched Internet Explorer 5 and the latest upgrade
includes a variety of new features, but no major changes. However,
the browser will be a key part of a Windows 98 upgrade due later
this year. Microsoft will bundle its Windows operating system with
its Web browser and a collection of fixes and application updates
under the name of Windows 98, Second Edition. New features include
some innovative ideas on how to present Web content along with one
or two others borrowed from the competition.

The launch comes amid significant change in the browser market. On
the legal front, the tactics that fueled its wildly successful bid
for share have gotten Microsoft into serious trouble in a federal
antitrust trial. It's main competitor in that arena, AOL, is on
the verge of acquiring Netscape and that makes it very important
for MSFT to stay ahead in the browser wars.

MSFT is generally covered at length in the main part of the OIN
but you don't need to know too much to see this is a favorable
position. First one in gets the prize!

PLAY (conservative/credit spread):

BUY  PUT APR-135 MSQ-PZ OI=3231 A=$0.62
SELL PUT APR-140 MSQ-PH OI=3804 B=$1.00

Chart = http://quote.yahoo.com/q?s=MSFT&d=3m


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This newsletter is a publication dedicated to the education 
of options traders. The newsletter is an information service 
only. The information provided herein is not to be construed 
as an offer to buy or sell securities of any kind. The 
newsletter picks are not to be considered a recommendation 
of any stock or option but an information resource to aid the
investor in making an informed decision regarding trading in 
options. It is possible at this or some subsequent date, the 
editor and staff of The Option Investor Newsletter may own, 
buy or sell securities presented. All investors should consult 
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information provided has been obtained from sources deemed 
reliable but is not guaranteed as to accuracy or completeness.
The newsletter staff makes every effort to provide timely 
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delivery times due to factors beyond our control.

The Option Investor Newsletter            3-21-99
Sunday                6  of  6

Diversify for Success...

The goal of the covered-call writer is to have a good combination
of high potential returns and adequate downside protection. The
problem is; selling an out-of-the-money call may offer higher
returns but affords only a modest amount of downside protection.
Selling an in-the-money call will provide more downside cushion
but generally offers a lower return. Some traders try to overcome
this dilemma by writing out-of-the-money calls on some stocks and
in-the-money calls on others. This may work occasionally but will
not produce superior results on a consistent basis. Conservative
traders may do best by choosing a favorable issue and writing half
of the position in-the-money and the other half out-of-the-money.
By spreading out the options, the writer may be able to acquire a
favorable return potential as well as adequate downside protection.

Investors that hold large positions in a specific stock can choose
even greater diversification by spreading the sold calls over time
as well as different strike prices. One can gain several benefits
by writing a portion of the calls near-term and the remaining calls
further in the future. In the event of significant stock price
movement, all of the various positions will not need to be adjusted
at the same time. This may include either having the stock called
away, or buying back one written call and selling another. Another
advantage is that the level of option premiums may become more
favorable than when the original series of calls were written. At
worst, only one group of options would be sold when the premiums
are low and hopefully they would increase in value before the next
expiration period. This type of diversification will also allow you
to own various positions at different strike prices, smoothing the
portfolio balance as the market fluctuates cyclically. This also
prevents all of one's stock from being committed at a single price.
It's obvious that the "combined" write offers an excellent balance
between potential return and favorable downside protection.
SUMMARY OF PREVIOUS PICKS (For the month of March)
Stock  Price  Last    Mon  Strike  Opt    Profit    ROI   Monthly
Sym    Picked Price        Price   Bid    /Loss           ROI

CCMC   10.69  14.06   Mar  10.00  1.69  *$  1.00   11.1%  16.1%
COOL   19.38  20.75   Mar  17.50  2.44  *$  0.56    3.3%  14.4%
COOL   19.06  20.75   Mar  17.50  2.63  *$  1.07    6.5%  14.1%
BTC    14.50  16.00   Mar  15.00  0.81  *$  1.31    9.6%  13.9%
ESPI    5.38  10.88   Mar   5.00  1.06  *$  0.68   15.7%  13.7%
BAMM   11.81  10.69   Mar  10.00  3.13  *$  1.32   15.2%  13.2%
NXTR   10.38  20.50   Mar  10.00  1.44  *$  1.06   11.9%  12.9%
GADZ    7.69   7.50   Mar   7.50  0.94   $  0.75   11.1%  12.1%
ZD     16.94  24.88   Mar  15.00  3.38  *$  1.44   10.6%  11.5%
DIGE    6.44   8.25   Mar   5.00  1.69  *$  0.25    5.3%  11.4%
ARTT    8.63   9.31   Mar   7.50  1.50  *$  0.37    5.2%  11.3%
ARTT    8.00   9.31   Mar   7.50  1.50  *$  1.00   15.4%  11.1%
PDQ    10.31   9.63   Mar  10.00  1.25   $  0.57    6.3%   9.1%
BTC    15.25  16.00   Mar  15.00  0.81  *$  0.56    3.9%   8.4%
USWB   37.13  43.88   Mar  35.00  3.38  *$  1.25    3.7%   8.0%
POSS   11.00  11.13   Mar  10.00  1.50  *$  0.50    5.3%   7.6%
IDTC   18.50  17.50   Mar  15.00  3.75  *$  0.25    1.7%   7.4%
CNXT   17.06  23.50   Mar  15.00  2.75  *$  0.69    4.8%   7.0%
IGEN   28.50  25.44   Mar  25.00  5.00  *$  1.50    6.4%   6.9%
BVSN   40.00  66.00   Mar  35.00  7.50  *$  2.50    7.7%   6.7%
NIN    22.63  23.38   Mar  20.00  3.50  *$  0.87    4.5%   6.6%
PPOD    9.13  11.00   Mar   7.50  2.13  *$  0.50    7.1%   6.2%
CIEN   22.44  23.75   Mar  20.00  3.50  *$  1.06    5.6%   6.1%
CTYA   33.63  42.88   Mar  30.00  5.13  *$  1.50    5.3%   5.7%
WKR    17.88  22.56   Mar  17.50  1.25  *$  0.87    5.2%   5.7%
BTIM   16.63  13.75   Mar  12.50  4.88  *$  0.75    6.4%   5.5%
CLST   12.31  10.56   Mar  10.00  3.00  *$  0.69    7.4%   5.4%
XYLN   19.94  36.44   Mar  17.50  3.25  *$  0.81    4.9%   5.3%
BYND   28.00  23.44   Mar  20.00  9.50  *$  1.50    8.1%   5.0%
ITVU   22.75  33.38   Mar  17.50  6.00  *$  0.75    4.5%   4.9%
CKFR   30.56  38.75   Mar  25.00  6.88  *$  1.32    5.6%   4.8%
AMMB   10.25   8.94   Mar  10.00  1.44   $  0.13    1.5%   3.2%
SRCM   21.06  15.88   Mar  17.50  5.00   $ -0.18   -1.1%   0.0%
CRCL   17.25  15.50   Mar  17.50  0.81   $ -0.94   -5.7%   0.0%
MYLX   11.88   6.63   Mar   7.50  4.75   $ -0.50   -7.0%   0.0%
GYMB   10.50   7.44   Mar  10.00  1.06   $ -2.00  -21.2%   0.0%
DAOU    6.06   6.69   Apr   5.00  1.56  *$  0.50   11.1%   9.7%
MTIC    5.88   5.44   Apr   5.00  1.44  *$  0.56   12.6%   9.1%
MCHM    9.75   9.03   Apr   7.50  2.88  *$  0.63    9.2%   6.6%
AMMB    9.88   8.94   Apr   7.50  2.88  *$  0.50    7.1%   6.2%
ENZN   16.56  15.69   Apr  15.00  2.38  *$  0.82    5.8%   5.0%
GALT   23.94  23.88   Apr  20.00  5.00  *$  1.06    5.6%   4.9%
FORE * 13.13  17.00   Apr  10.00  3.63  *$  0.50    5.3%   4.9%
NWAC   25.69  27.50   Apr  25.00  2.00  *$  1.31    5.5%   4.8%
PWAV   28.94  27.00   Apr  25.00  5.13  *$  1.19    5.0%   4.3%

March Plays Previously Dropped: ALKS, LGND, SNAP

 * FORE - From Thursday's March 18 combo's section

-ROI is equal to the profit (or loss) divided by the cost-basis.
 Monthly ROI represents the return on a monthly basis.
 Example: a 10% return in 20 days equals 15.2% ROI for a month).
-Margin is not used in any calculations.
-Profit/Loss Column: Asterisk indicates stock price above strike 
 price and should be called.  Stock that will not be called is 
 assumed sold at current price (for tracking purposes).
OI - Open Interest
CB - Cost Basis (Prc pd - Prm rec'd = CB, the break-even point)
RC  - Return Called
RNC - Return Not Called (Stock Price Unchanged)
Sequenced by Company
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

AXTI   21.25  Apr 17.50  AQX DW  4.75  132   16.50   6.06%   6.06%
ARTT    9.38  Apr  7.50  AOQ DU  2.56  1303   6.82   9.97%   9.97%
CUST   11.75  Apr 10.00  HQU DB  2.31  325    9.44   5.93%   5.93%
ESPI   10.88  Apr  7.50   AQ DU  3.75  1098   7.13   5.19%   5.19%
FFD    10.88  Apr 10.00  FFD DB  2.00  452    8.88  12.61%  12.61%
ITVU   33.50  Apr 25.00  QYU DE  9.50  400   24.00   4.17%   4.17%
MMCN   14.56  Apr 12.50  CMQ DV  2.75  191   11.81   5.84%   5.84%
UBS    11.88  Apr 12.50  UBS DV  1.25  1235  10.63  17.65%  11.76%
VYTL   25.50  Apr 22.50  VQL DX  4.00  360   21.50   4.65%   4.65%
Sequenced by Return Called 
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

UBS    11.88  Apr 12.50  UBS DV  1.25  1235  10.63  17.65%  11.76%
FFD    10.88  Apr 10.00  FFD DB  2.00  452    8.88  12.61%  12.61%
ARTT    9.38  Apr  7.50  AOQ DU  2.56  1303   6.82   9.97%   9.97%
AXTI   21.25  Apr 17.50  AQX DW  4.75  132   16.50   6.06%   6.06%
CUST   11.75  Apr 10.00  HQU DB  2.31  325    9.44   5.93%   5.93%
MMCN   14.56  Apr 12.50  CMQ DV  2.75  191   11.81   5.84%   5.84%
ESPI   10.88  Apr  7.50   AQ DU  3.75  1098   7.13   5.19%   5.19%
VYTL   25.50  Apr 22.50  VQL DX  4.00  360   21.50   4.65%   4.65%
ITVU   33.50  Apr 25.00  QYU DE  9.50  400   24.00   4.17%   4.17%
Sequenced by Return Not Called
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

FFD    10.88  Apr 10.00  FFD DB  2.00  452    8.88  12.61%  12.61%
UBS    11.88  Apr 12.50  UBS DV  1.25  1235  10.63  17.65%  11.76%
ARTT    9.38  Apr  7.50  AOQ DU  2.56  1303   6.82   9.97%   9.97%
AXTI   21.25  Apr 17.50  AQX DW  4.75  132   16.50   6.06%   6.06%
CUST   11.75  Apr 10.00  HQU DB  2.31  325    9.44   5.93%   5.93%
MMCN   14.56  Apr 12.50  CMQ DV  2.75  191   11.81   5.84%   5.84%
ESPI   10.88  Apr  7.50   AQ DU  3.75  1098   7.13   5.19%   5.19%
VYTL   25.50  Apr 22.50  VQL DX  4.00  360   21.50   4.65%   4.65%
ITVU   33.50  Apr 25.00  QYU DE  9.50  400   24.00   4.17%   4.17%
Company Descriptions
AXTI - American Xtal Tech., Inc.  $21.25  *** Semiconductors ***

American Xtal Tech. uses a proprietary vertical gradient freeze
technique to produce high-performance compound semiconductor base
materials, or substances, for use in a variety of electronic and 
opto-electronic applications. In January, AXTI posted 4Q EPS of
$0.10 vs. $0.08 meeting estimates and then in March, CBOE started
options on American Xtal. Chart is very bullish and this position
has a cost basis near a strong technical support area.

Apr 17.50 AQX-DW Bid=4.75 OI=132 CB=16.50 RC=6.06% RNC=6.06% 

Chart = http://quote.yahoo.com/q?s=AXTI&d=3m
ARTT - Advanced Radio Telecom  $9.38  *** Replay ***

ARTT provides wireless broadband telecommunications services 
using microwave transmissions throughout the U.S. ARTT posted
a 4Q loss of $0.57 (vs. loss of $1.12) which appears mainly due
to cost-cutting. This play still looks good with solid technical
aspects and we are still conservative with an ITM play...(be my
guest to go OTM!)

Apr 7.50 AOQ-DU Bid=2.56 OI=1303 CB=6.82 RC=9.97% RNC=9.97%

Chart = http://quote.yahoo.com/q?s=ARTT&d=3m
CUST - CustomTracks Corporation  $11.75  *** New High Soon? ***

CustomTracks plans to assemble, manufacture and distribute custom
digital data products, such as CD's that contain personalized 
music. CUST currently provides systems and services to the access
control and electronic security management systems. The correction
in February could be reaction to Customtracks backing off its plan
for personalized CD's and moving to develop an Internet payments
systems. The stock has since rebounded on strong volume and
insider buying. Good support near our cost basis.

Apr 10.00 HQU-DB Bid=2.31 OI=325 CB=9.44 RC=5.93% RNC=5.93% 

Chart = http://quote.yahoo.com/q?s=CUST&d=3m
ESPI - e.spire Communications  $10.88  *** Buy-Out? ***

ESPI is a facilities based Integrated Communications Provider to
businesses primarily in major markets in the southern half of the
United States. We are speculating that somebody is interested in
e.spire...could it be Qwest?  They just picked up a SVP-CIO who 
was previously at Qwest.(rumors?) We like the heavy volume over
the last several weeks...thus the tape usually tells all.

Apr 7.50 AQ-DU Bid=3.75 OI=1098 CB=7.13 RC=5.19% RNC=5.19% 

Chart = http://quote.yahoo.com/q?s=ESPI&d=3m
FFD - Fairfield Communities  $10.88  *** Take-over? ***

FFD sells vacation ownership interests (VOIs), commonly known as
timeshares, through its points-based vacation system, Fairshare 
Plus. FFD also offers financing for VOI purchasers. What can stop
a good down trend? A good rumored buy-out! Since March, Fairfield
has started climbing fast with recent heavy volume on Friday and
option volume was more than three times the current Open Interest.
If the rumor fades so will this stock but with a cost basis near
a recent support area and depending on your risk/reward tolerance,
you may want to speculate on FFD...

Apr 10.00 FFD-DB Bid=2.00 OI=452 CB=8.88 RC=12.61% RNC=12.61% 

Chart = http://quote.yahoo.com/q?s=FFD&d=3m
ITVU - INTERVU Inc  $33.50     *** Big Mover! ***

INTERVU offers powerful solutions to deliver live and on-demand
audio and video broadcasts over the Internet. INTERVU's media
services are utilized by many different types of businesses and
they are the only Internet audio/video delivery company with a
patent-pending, automated network. This distributed network
architecture allows the company to handle very high volumes of
simultaneous Internet users while ensuring first-rate delivery
of audio/video to users' computers. We'll remain conservative
and deep ITM after breaking out of a support area near $25.

Apr 25.00 QYU-DE Bid=9.50 OI=400 CB=24.00 RC=4.17% RNC=4.17% 

Chart = http://quote.yahoo.com/q?s=ITVU&d=3m
MMCN - MMC Networks, Inc.  $14.56  *** Upgraded! ***

MMCN Inc, is a developer and supplier of high-performance, open-
architecture, software-programmable processors optimized for 
networking applications. MMC Networks started climbing in February
after increased earnings prompted an upgrade by Needham & Co. to
a "Buy" with a price target of $20. Kaufman Bros. just started
coverage on Wednesday and the chart suggests a strong support
area near our cost basis.

Apr 12.50 CMQ-DV Bid=2.75 OI=191 CB=11.81 RC=5.84% RNC=5.84% 

Chart = http://quote.yahoo.com/q?s=MMCN&d=3m
UBS - U.S. Bioscience, Inc.  $11.88  *** OTM Speculation ***

UBS, a pharmaceutical company, develops and markets drugs for 
treating patients with cancer, acquired immune deficiency 
syndrome, and other allied diseases and infections. UBS reported
record 4Q sales as their losses narrowed which is reinforced by
the chart showing a strong up trend starting at the beginning
or the year. Technicals are excellent and suggest the current
trend will continue!

Apr 12.50 UBS-DV Bid=1.25 OI=1235 CB=10.63 RC=17.65% RNC=11.76% 

Chart = http://quote.yahoo.com/q?s=UBS&d=3m
VYTL - Viatel, Inc.  $25.50   *** Blue Sky Territory ***

VYTL provides international and national long distance tele-
communications services to small and medium sized businesses,
carriers and other resellers. Viatel rebounded strongly in March
after announcing strong fourth quarter results and tie-ins with
Lucent. Add coverage-being-initiated and the selling some high
yield bonds to fund the further expansion of its Circe Network.
The chart is obviously bullish though Viatel may be overextended
so we will remain conservative and ITM.

Apr 22.50 VQL-DX Bid=4.00 OI=360 CB=21.50 RC=4.65% RNC=4.65% 

Chart = http://quote.yahoo.com/q?s=VYTL&d=3m

These Pct are not calculated using margin. These are pure 
returns. Margin will increase the percentages. No recommendation
is made on these plays. This is only a numerically produced list 
of the options with the highest percentage of return for dollars
invested. If you want to do your own research this is where to 

Stock    Price Month Strike Symbol Price  PctRtn    Vol  OpnInt
PDX      22.06  Apr   22.50 PDXDX   3.75   17.00    162     360
ZD       24.88  Apr   25.00  ZDDE   3.88   15.58    724    4162
SKYT     16.38  Apr   17.50 MMQDW   2.31   14.12    233     372
IDTC     17.50  Apr   17.50 IQJDW   2.38   13.57    622    1301
SDTI     14.88  Apr   15.00 QSDDC   2.00   13.45      8     365
FORE     17.00  Apr   17.50 FQODW   2.25   13.24   4335    3949
ESPI     10.88  Apr   12.50  AQDV   1.44   13.22   1201     514
ERTH      9.81  Apr   10.00 QERDB   1.25   12.74     18     572
DRMD      6.88  Apr    7.50 DUQDU   0.88   12.73     79     620
ESCMF     7.44  Apr    7.50 QFCDU   0.94   12.61    140    1033
HS        6.00  Apr    7.50  HSDU   0.75   12.50    755    2429
PDX      22.06  Apr   25.00 PDXDE   2.75   12.46    195     467
EGGS     19.69  Apr   20.00 EGQDD   2.44   12.38   1418    2491
MLG       9.63  Apr   10.00 MLGDB   1.19   12.34     10     483
PENN      7.19  Apr    7.50 UQNDU   0.88   12.17     10      26
SAVLY    12.38  Apr   12.50 QVYDV   1.50   12.12     20     168
ARTT      9.31  Apr   10.00 AOQDB   1.13   12.08    757    1110
GSTX      9.94  Apr   10.00 QGSDB   1.19   11.95     44     455
CBIZ     10.00  Apr   10.00 SSQDB   1.19   11.88     60     157
BNYN     11.88  Apr   12.50 QYNDV   1.38   11.58    184     661
OCR      17.13  Apr   17.50 OCRDW   1.94   11.31     20      65
AMMB      8.94  Apr   10.00 UKQDB   1.00   11.19    929    2436
IHS       6.81  Apr    7.50 IHSDU   0.75   11.01     15     150
GCTI     12.63  Apr   15.00 QHFDC   1.38   10.89     55      43
TERA      6.94  Apr    7.50 QIPDU   0.75   10.81    133     797
PLCM     13.94  Apr   15.00 QHDDC   1.50   10.76      3     367
UBS      11.69  Apr   12.50 UBSDV   1.25   10.70    230    1235
HMTT      4.16  Apr    5.00 HTQDA   0.44   10.53     30     330
RMDY     14.88  Apr   15.00 LRQDC   1.56   10.50     50     145
MMWW     14.94  Apr   15.00 EQBDC   1.56   10.46   1018     169
ENMD     21.63  Apr   22.50 QMADX   2.25   10.40     20      97
TRA       4.81  Apr    5.00 TRADA   0.50   10.39     52     309
DAOU      6.69  Apr    7.50 QQXDU   0.69   10.28    193    1846
CS        9.75  Apr   10.00  CSDB   1.00   10.26    971    4695
PTEK      9.88  Apr   10.00 TQODB   1.00   10.13    678    1666
TLXN      8.72  Apr   10.00 TNQDB   0.88   10.04     75      80
CRUS      7.50  Apr    7.50 CUQDU   0.75   10.00      5      24
GADZ      7.50  Apr    7.50 EQKDU   0.75   10.00     30     286
SIPX     12.50  Apr   12.50 UQXDV   1.25   10.00      3      17
PDX      22.06  May   22.50 PDXEX   4.75   21.53     11      72
ZAP       9.81  May   10.00 ZAPEB   1.94   19.75     10    2537
CPWR     24.81  May   25.00 CWQEE   4.63   18.64      5     321
WSTL      4.16  May    5.00 QLWEA   0.75   18.05    130     303
ENMD     21.63  May   22.50 QMAEX   3.88   17.92     10     156
ARTT      9.31  May   10.00 AOQEB   1.63   17.45     14     868
PTEK      9.88  May   10.00 TQOEB   1.63   16.46     35    1521
ARDT     17.00  May   17.50 KQVEW   2.50   14.71      4      40
WAVO      7.72  May   10.00 WKQEB   1.13   14.57     45    1030
UWW       6.81  May    7.50 UWWEU   0.94   13.76    100     444
IMNR      9.22  May   10.00 IMQEB   1.25   13.56     22     781
CBR      21.25  May   22.50 CBREX   2.88   13.53     15     618
BD       12.50  May   12.50  BDEV   1.69   13.50     30      92
NZYM      4.75  May    5.00 YZQEA   0.63   13.16     10      77
CYMI     24.00  May   25.00 CQGEE   3.13   13.02     11     237
OMKT     13.13  May   15.00 OQMEC   1.69   12.86     54     748
MSC       6.88  May    7.50 MSCEU   0.88   12.73     25      17
OMPT     11.31  May   12.50 QTTEV   1.44   12.71     10     709
TLB      24.75  May   25.00 TLBEE   3.13   12.63     10      57
PGO      14.88  May   15.00 PGOEC   1.88   12.61      7     482
PPD      27.75  May   30.00 PPDEF   3.50   12.61     18      73
PRIA     29.00  May   30.00 UXQEF   3.63   12.50     13     114
MWHS     13.38  May   15.00 MQREC   1.63   12.15     10       5
UAG      11.50  May   12.50 UAGEV   1.38   11.96     18      19
PDX      22.06  May   30.00 PDXEF   2.63   11.90     20     229
ENMD     21.63  May   25.00 QMAEE   2.56   11.85      5     475
PSSI      9.00  May   10.00 PYQEB   1.06   11.81     20      50
BTC      16.00  May   17.50 BTCEW   1.88   11.72     10      15
PAH       4.81  May    5.00 PAHEA   0.56   11.69     12     303
CEPH      9.25  May   10.00 CQEEB   1.06   11.49     40    1856
SAVLY    12.38  May   15.00 QVYEC   1.38   11.11     60     456
PWAV     27.00  May   30.00 VFQEF   3.00   11.11     16      93
EGHT      4.00  May    5.00 EDQEA   0.44   10.94     20      77
UTEK     14.88  May   15.00 UQTEC   1.63   10.92      2      99
ATRX     11.50  May   12.50 OQFEV   1.25   10.87      1      40
QNTM     18.50  May   20.00 QNQED   2.00   10.81     34    1241
ARTT      9.31  May   12.50 AOQEV   1.00   10.74      4     320
KEA      24.88  May   25.00 KEAEE   2.63   10.55     69     335
HAIN     15.50  May   17.50 QQHEW   1.63   10.48     10     612
BAANF     8.38  May   10.00 BQFEB   0.88   10.45     20    1542
CPWR     24.81  May   27.50 CWQEY   2.56   10.33     60     346
ATML     17.25  May   17.50 AQTEW   1.75   10.14     75    1897
ITCD     18.50  May   20.00 QIJED   1.88   10.14      9      29
WHIT     23.50  May   25.00 WMQEE   2.38   10.11     35    1036
HELE     12.38  May   12.50 EHQEV   1.25   10.10     10      71
BGP      14.88  May   15.00 BGPEC   1.50   10.08     17     299
DORL     17.38  May   17.50 QDLEW   1.75   10.07     50      65
TERA      6.94  Jun    7.50 QIPFU   1.75   25.23     25     824
TERA      6.94  Jun   10.00 QIPFB   1.56   22.52    290     570
AMMB      8.94  Jun   10.00 UKQFB   2.00   22.38     31    1078
HSE       7.50  Jun    7.50 HSEFU   1.56   20.83      5      14
MCHM      9.03  Jun   10.00  QQFB   1.88   20.76      8     685
IDTC     17.50  Jun   17.50 IQJFW   3.63   20.71    115     484
ESPI     10.88  Jun   12.50  AQFV   2.25   20.69     96     394
SKYT     16.38  Jun   17.50 MMQFW   3.38   20.61     93     524
GZTC      4.91  Jun    5.00 GEQFA   1.00   20.38     10     131
CYGN      6.75  Jun    7.50 YNQFU   1.38   20.37     30     637
EGGS     19.69  Jun   20.00 EGQFD   4.00   20.32    305    1317
GCTI     12.63  Jun   15.00 QHFFC   2.56   20.30     50      90
CYCH     14.44  Jun   15.00 KBQFC   2.88   19.91     20     843
ENER      9.88  Jun   10.00 EQIFB   1.94   19.62     60     456
BTIM     13.75  Jun   15.00 QBOFC   2.63   19.09     66     248
CRUS      7.50  Jun    7.50 CUQFU   1.38   18.33     20     344
PPOD     11.00  Jun   12.50 QPPFV   2.00   18.18    171     339
CYCH     14.44  Jun   17.50 KBQFW   2.56   17.75     10    1492
CATP     11.38  Jun   12.50 TQPFV   2.00   17.58    677      22
DBCC     13.56  Jun   15.00 BQDFC   2.38   17.51     66     771
TWMC     11.88  Jun   12.50 TQTFV   2.06   17.37     60      74
DRMD      6.88  Jun    7.50 DUQFU   1.19   17.27     33     600
IDTC     17.50  Jun   20.00 IQJFD   3.00   17.14     18     581
AVID     23.69  Jun   25.00 AQIFE   4.00   16.89     61      40
CURE     12.25  Jun   12.50 NQHFV   2.06   16.84      5      58
PAGE      4.13  Jun    5.00 PGQFA   0.69   16.67      5     853
EGGS     19.69  Jun   22.50 EGQFX   3.25   16.51    192     508
RMDY     14.88  Jun   15.00 LRQFC   2.44   16.39      5     126
GSTRF    16.94  Jun   17.50 YVQFW   2.75   16.24     25     943
HBI       4.63  Jun    5.00 HBIFA   0.75   16.22      6     446
BCGI     12.50  Jun   12.50 QGBFV   2.00   16.00     10      57
CELL      6.28  Jun    7.50 QEFFU   1.00   15.92     24    1346
VVUS      3.94  Jun    5.00 VVQFA   0.63   15.87     30    1973
ADLT     10.31  Jun   12.50 LQYFV   1.63   15.76      5      29
THQI     19.88  Jun   20.00 QHIFD   3.13   15.72      3      76
ROMC      7.19  Jun    7.50 RPQFU   1.13   15.65     32      80
NETA     28.06  Jun   30.00 CQMFF   4.38   15.59    432     449
PLAT     10.13  Jun   12.50 FLQFV   1.56   15.43     10     757
PXD       7.31  Jun    7.50 PXDFU   1.13   15.38      3     106
GCTI     12.63  Jun   17.50 QHFFW   1.94   15.35     20      53
SKYT     16.38  Jun   20.00 MMQFD   2.50   15.27      6     904
VLNC      7.00  Jun    7.50 VHQFU   1.06   15.18      2     676
TLXN      8.72  Jun   10.00 TNQFB   1.31   15.05    348    1108
UBS      11.69  Jun   12.50 UBSFV   1.75   14.97     22    1177
ANIC      6.75  Jun    7.50 NIQFU   1.00   14.81     20     247
INCY     20.63  Jun   22.50 IPQFX   3.00   14.55     10      20
ESSI      6.88  Jun    7.50 QESFU   1.00   14.55     50     147
ZITL      2.59  Jun    5.00 ZQIFA   0.38   14.46    100    2157
FLC       6.94  Jun    7.50 FLCFU   1.00   14.41     64    3130
FEET     11.75  Jun   12.50 JQFFV   1.69   14.36      1     342
GLBL      7.94  Jun   10.00 GQOFB   1.13   14.17      6     644
TECD     15.81  Jun   17.50 TDQFW   2.19   13.83     10      35
ESPI     10.88  Jun   15.00  AQFC   1.50   13.79     57     225
EGGS     19.69  Jun   25.00 EGQFE   2.69   13.65    254     996
VIRS     12.88  Jun   15.00 VQPFC   1.75   13.59     12     212
IVX      12.50  Jun   12.50 IVXFV   1.69   13.50     21    1105
HMAR      4.25  Jun    5.00 VQHFA   0.56   13.24     20     152
BOCI      3.78  Jun   10.00 BQCFB   0.50   13.22     40    1555
BBX       7.13  Jun    7.50 BBXFU   0.94   13.16     10     345
GEMS      3.81  Jun    5.00 GQMFA   0.50   13.11     10     410
IDTC     17.50  Jun   22.50 IQJFX   2.25   12.86     10     191
TSCC      6.84  Jun    7.50 QSTFU   0.88   12.79     10     195
VVUS      3.94  Jun    7.50 VVQFU   0.50   12.70     10     214
FSII      8.50  Jun   10.00 FQHFB   1.06   12.50     45      65
AMKR      8.50  Jun   10.00 QELFB   1.06   12.50     61    2549
REXI      9.00  Jun   10.00 QREFB   1.13   12.50     10     109
MRVT      8.50  Jun   12.50 SQDFV   1.06   12.50     10     151
PCTY      4.00  Jun    7.50 TYQFU   0.50   12.50    123      11
SKM      12.06  Jun   12.50 SKMFV   1.50   12.44     43     176
SAM       8.56  Jun   10.00 SAMFB   1.06   12.41     30     153
TGX       6.06  Jun    7.50 TGXFU   0.75   12.37     40     326
SBGI     14.69  Jun   15.00 JQOFC   1.81   12.34      3      96
DMIC      8.13  Jun   10.00 DMQFB   1.00   12.31     44     138
IPIC      3.06  Jun    5.00 IQHFA   0.38   12.24    100     274
IM       17.94  Jun   20.00  IMFD   2.19   12.20     30      95
CNDS      5.13  Jun    7.50 KQNFU   0.63   12.20     25     321
FFD      10.81  Jun   12.50 FFDFV   1.31   12.14     20      94
CUI      26.81  Jun   30.00 CUIFF   3.25   12.12      4      87
INTS     14.50  Jun   15.00 QINFC   1.75   12.07     20     194
AMMB      8.94  Jun   12.50 UKQFV   1.06   11.89     19     465
SYBS      6.31  Jun    7.50 SBQFU   0.75   11.88     19     787
BEV       4.75  Jun    5.00 BEVFA   0.56   11.84      4    1175
STK      29.56  Jun   30.00 STKFF   3.50   11.84     20     233
AEN      14.81  Jun   17.50 AENFW   1.75   11.81     10     821
GSTRF    16.94  Jun   20.00 YVQFD   2.00   11.81     10    3214
ESV      11.69  Jun   12.50 ESVFV   1.38   11.76     34    1164
NVX       8.50  Jun   10.00 NVXFB   1.00   11.76     10     368
AFCI      8.00  Jun   10.00 AQFFB   0.94   11.72    125    1206
ELIX      8.56  Jun   10.00 XQQFB   1.00   11.68     10     101
IDC       4.31  Jun    5.00 IDCFA   0.50   11.59     15    3058
CATP     11.38  Jun   15.00 TQPFC   1.31   11.54    241      64
ICIX     25.50  Jun   27.50 QIXFY   2.94   11.52    114     517
UFI      12.50  Jun   12.50 UFIFV   1.44   11.50      5     154
DIIG     23.94  Jun   25.00 QIDFE   2.75   11.49      5     137
KELL     16.00  Jun   17.50 KQCFW   1.81   11.33     94     248
MDM       3.38  Jun    5.00 MDMFA   0.38   11.11    224    2568
GNTX     24.88  Jun   25.00 GXQFE   2.75   11.06      2    1538
ABTE      7.94  Jun   10.00 QZBFB   0.88   11.02     10    3217
SAWS     27.38  Jun   30.00 QWSFF   3.00   10.96     69     100
CELL      6.28  Jun   10.00 QEFFB   0.69   10.95    368     616
ROSI     12.00  Jun   12.50 QRSFV   1.31   10.94     43     293
SFA      28.56  Jun   30.00 SFAFF   3.13   10.94      3     731
PCTY      4.00  Jun   10.00 TYQFB   0.44   10.94    200     128
RMDY     14.88  Jun   17.50 LRQFW   1.63   10.92     16     114
BTIM     13.75  Jun   20.00 QBOFD   1.50   10.91     30     196
CEFT     28.69  Jun   30.00 EQFFF   3.13   10.89     40     124
ASPT      6.94  Jun   10.00 ATQFB   0.75   10.81     10     284
FINL     14.03  Jun   15.00 FQNFC   1.50   10.69     45     300
TECD     15.81  Jun   20.00 TDQFD   1.69   10.67     20     297
GCO       9.44  Jun   10.00 GCOFB   1.00   10.60      5      26
CHRZ     10.63  Jun   12.50 ZQHFV   1.13   10.59     35      64
THQI     19.88  Jun   22.50 QHIFX   2.06   10.38      3      32
MCHM      9.03  Jun   12.50  QQFV   0.94   10.38     18     568
DO       29.06  Jun   30.00  DOFF   3.00   10.32     46    1193
SKYT     16.38  Jun   22.50 MMQFX   1.69   10.31     20     589
AHG       8.50  Jun   10.00 AHGFB   0.88   10.29     10     920
AVID     23.69  Jun   30.00 AQIFF   2.44   10.29     12     119
ICN      23.75  Jun   25.00 ICNFE   2.44   10.26     70     793
OWC      28.75  Jun   30.00 OWCFF   2.94   10.22      1       9
DBCC     13.56  Jun   17.50 BQDFW   1.38   10.14     31     542
ENER      9.88  Jun   12.50 EQIFV   1.00   10.13      3     296


The Best Strategy...

There are many types of investors and no single strategy can work
for all of them. Suitability; an investor's risk/reward attitude
and financial condition, is the key to determining which strategy
may be best for any one individual. 

There are aggressive trading methods such as outright Put or Call
buying and high potential spreads or combinations. There are also
conservative techniques such as covered-call writing and LEAPS. A
third category contains the neutral approach; straddles, calendar
or ratio spreads and butterflies.

Every strategy has risk and it is impossible to classify any
specific technique as the absolute "best" one. However, it is
important to understand the mechanics of any strategy that you
are using and try to construct a portfolio based on the proper
risk/reward attitude.

The average investor will normally do well with a position that
has limited risk and the potential for large profits because one
successful trade can easily overcome a series of smaller losses.
The conservative investor would not want to be an outright buyer
of options. For him, a covered-call position with moderate profit
potential and reduced risk would be more appealing. An aggressive
trader who is willing to take larger risks for the opportunity of
making greater profits might buy and sell index or equity options.
Some investors just want low maintenance plays with the chance to
make reasonable profits without risking excessive amounts of money.
Conservative, in-the-money debit spreads would probably appeal to
this group. The wealthy investor may be attracted to methods that
offer the opportunity to make money against collateral portfolios.
Writing naked puts or credit spreads and combinations may solve
his needs.

It is important to remember that the investment objectives are
more important than the merits of the technique itself. If the
strategy is not suitable for the investor, then it should not be
used, no matter how attractive it appears...Good Luck!
SUMMARY OF PREVIOUS PICKS (Summary for the month of March)
Stock  Price  Last   Mon   Strike  Opt    Profit     ROI   Monthly
Sym    Picked Price        Price   Bid    /Loss            ROI

COOL   19.38  20.75   Mar  17.50  0.63  *$   0.63    9.7%  42.1%
COOL   19.06  20.75   Mar  15.00  0.50  *$   0.50   11.6%  25.2%
ENMD   20.44  21.63   Mar  17.50  0.63  *$   0.63   10.7%  23.3%
ITVU   22.06  33.38   Mar  20.00  0.38  *$   0.38    5.3%  23.1%
HRBC    7.25   6.19   Mar   5.00  0.31  *$   0.31   17.6%  19.1%
SOF    21.50  26.63   Mar  17.50  0.44  *$   0.44    8.7%  19.0%
PSIX   37.88  39.13   Mar  35.00  1.00  *$   1.00    7.5%  16.4%
EGRP   46.06  60.50   Mar  35.00  2.13  *$   2.13   18.8%  16.3%
SDLI   54.50  73.31   Mar  45.00  1.38  *$   1.38   10.1%  14.6%
OMKT   12.69  13.13   Mar  10.00  0.38  *$   0.38   13.0%  14.1%
DRMD    6.75   6.88   Mar   5.00  0.25  *$   0.25   15.6%  13.6%
BTC    14.50  16.00   Mar  12.50  0.38  *$   0.38    9.1%  13.2%
DLP    32.56  34.69   Mar  25.00  0.63  *$   0.63    8.8%  12.8%
ZD     16.94  24.88   Mar  12.50  0.44  *$   0.44   11.5%  12.5%
CLST   10.94  10.56   Mar   7.50  0.25  *$   0.25   10.2%  11.1%
PRD    24.25  20.63   Mar  20.00  0.44  *$   0.44    7.5%  10.8%
IGEN   28.50  25.44   Mar  22.50  0.63  *$   0.63   10.0%  10.8%
NAV    45.00  40.38   Mar  40.00  0.63  *$   0.63    4.6%  10.0%
OXHP   19.00  17.81   Mar  17.50  0.44  *$   0.44    6.7%   9.7%
CIEN   22.44  23.75   Mar  17.50  0.44  *$   0.44    8.9%   9.7%
BVSN   40.00  66.00   Mar  30.00  1.00  *$   1.00   11.1%   9.7%
THQI   23.25  19.88   Mar  15.00  0.69  *$   0.69   12.9%   9.4%
CIEN   27.81  23.75   Mar  22.50  0.38  *$   0.38    6.1%   8.9%
SUIT   32.00  26.38   Mar  25.00  0.88  *$   0.88   12.1%   8.8%
ITVU   22.75  33.38   Mar  15.00  0.38  *$   0.38    7.7%   8.4%
CIEN   24.19  23.75   Mar  17.50  0.63  *$   0.63   11.5%   8.3%
PSUN   27.00  31.75   Mar  20.00  0.69  *$   0.69   11.3%   8.2%
GLIA   27.00  24.00   Mar  20.00  0.31  *$   0.31    5.4%   7.9%
LUK    30.50  31.06   Mar  25.00  0.25  *$   0.25    3.6%   7.8%
ZONA   32.25  29.38   Mar  25.00  0.75  *$   0.75   10.4%   7.5%
SPLN   54.06  49.88   Mar  40.00  0.38  *$   0.38    3.4%   7.4%
BTIM   16.63  13.75   Mar  10.00  0.25  *$   0.25    7.0%   6.1%
AVID   30.00  23.69   Mar  22.50  0.44  *$   0.44    6.8%   5.9%
CATP** 30.00  11.38   Mar  22.50  0.44   $ -10.68 -165.8%   0.0%
ARTT    8.38   9.31   Apr   7.50  0.75  *$   0.75   23.3%  20.2%
MCHM    9.75   9.03   Apr   7.50  0.56  *$   0.56   22.3%  16.2%
AMMB    9.88   8.94   Apr   7.50  0.44  *$   0.44   18.2%  15.8%
FORE * 13.13  17.00   Apr  10.00  0.50  *$   0.50   16.0%  14.7%
MCHM   10.31   9.03   Apr   7.50  0.38  *$   0.38   15.6%  13.5%
ITX    15.06  14.75   Apr  12.50  0.31  *$   0.31    8.2%   7.1%
WKR    21.38  22.56   Apr  17.50  0.38  *$   0.38    7.5%   6.5%
NWAC   25.69  27.50   Apr  22.50  0.50  *$   0.50    6.6%   5.7%

March Plays Previously Dropped:  AWA

 * FORE - From Thursday's (March 18) combo's section.

** CATP - catastrophic news:  announced after Thursday's close
   that their 1st quarter earnings would be roughly half of what
   the street expected and gapped down at the open Friday.

-ROI is equal to the profit (or loss) divided by the original
 investment requirement (varies broker to broker). 
-Monthly ROI represents the return on a monthly basis.
 Example: a 10% return in 20 days equals 15.2% ROI for a month).
-Profit/Loss Column: Asterisk indicates stock price above strike
 price and put option should expire - not be exercised.  Stock 
 to be exercised assumed sold at current price.(for tracking)
OI  - Open Interest
CB  - Cost Basis (break-even point if put exercised) 
ROI - Return On Investment - formula: premium received divided by
the collateral required by the broker (the greater of 40% of the
current price of the stock plus the premium, minus the difference
between the cost of the stock and the strike price; or 20% of the 
current price of the stock plus the premium.) As you move further
from the stock price, the 20% requirement will take precedence.
ROI may vary based on equity required by each individual broker.
Sequenced by Company
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

COOL   20.81  Apr 15.00  QOO PC  0.50  100   14.50  10.73%
DRMD    6.81  Apr  5.00  DUQ PA  0.44  375    4.56  24.42%
EGGS   19.69  Apr 15.00  EGQ PC  0.50  307   14.50  11.27%
ITVU   33.50  Apr 22.50  QYU PX  0.81  32    21.69  10.79%
NDB    25.13  Apr 20.00  NDB PD  1.06  45    18.94  17.42%
PWAV   27.06  Apr 22.50  VFQ PX  0.63  0     21.87   9.14%
RCNC   31.31  Apr 25.00  RBQ PE  0.50  48    24.50   7.39%
ZD     25.06  Apr 17.50   ZD PW  0.75  552   16.75  13.02%
Sequenced by Return on Investment  
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

DRMD    6.81  Apr  5.00  DUQ PA  0.44  375    4.56  24.42%
NDB    25.13  Apr 20.00  NDB PD  1.06  45    18.94  17.42%
ZD     25.06  Apr 17.50   ZD PW  0.75  552   16.75  13.02%
EGGS   19.69  Apr 15.00  EGQ PC  0.50  307   14.50  11.27%
ITVU   33.50  Apr 22.50  QYU PX  0.81  32    21.69  10.79%
COOL   20.81  Apr 15.00  QOO PC  0.50  100   14.50  10.73%
PWAV   27.06  Apr 22.50  VFQ PX  0.63  0     21.87   9.14%
RCNC   31.31  Apr 25.00  RBQ PE  0.50  48    24.50   7.39%
Company Descriptions
Cool - Cyberian Outpost  $20.81     *** Internet Commerce ***

Cyberian Outpost uses the Internet to sell name-brand computer
hardware, software, and peripheral products to consumers and
small businesses. The virtual superstore has more than 130,000
different inventory items available and they just unveiled a new
online auction site for customers looking to bid on cut-rate
priced computer equipment. All four analysts listed in the
consensus rating have a 'buy' recommendation and the Technicals
are favorable with support near $15.

Apr  15.00  QOO-PC  Bid=0.50  OI=100  CB=14.50  ROI=10.73%

Chart = http://quote.yahoo.com/q?s=COOL&d=3m
DRMD - Duramed  $6.81     *** New Drug Approvals ***

Duramed Pharmaceuticals makes generic prescription drugs and has
approval to market a hydroxyurea capsule for treating cancer. The
company has applied for FDA approval for an estrogen-replacement
drug and they are expanding into branded products. They sell to
drugstore chains, wholesalers, and private distributors. FDA has
approved its NDA for Oxycodone and Acetaminophen Capsules USP
and with this approval DRMD no longer will be sharing profits.

Apr  5.00  DUQ-PA  Bid=0.44  OI=375 CB=4.56  ROI=24.42%

Chart = http://quote.yahoo.com/q?s=DRMD&d=3m
Eggs - Egghead.com  $19.69     *** Upgrade! ***

Egghead.com is an Internet-only reseller of PC hardware, software,
and accessories. Its main Web site, egghead.com, has about 40,000
products, including computer hardware, software, and peripherals,
as well as excess, reconditioned, and closeout brand-name computer
products. They have a 24-hour hardware and software auction site.
U.S. Bancorp Piper Jaffray began coverage of the stock recently
with a "strong buy" rating and a 12-month price target of $28.

Apr  15.00  EGQ-PC  Bid=0.50  OI=307  CB=14.50  ROI=11.27%

Chart = http://quote.yahoo.com/q?s=EGGS&d=3m
ITVU - INTERVU Inc  $33.50     *** Big Mover! ***

INTERVU offers powerful solutions to deliver live and on-demand
audio and video broadcasts over the Internet. INTERVU's media
services are utilized by many different types of businesses and
they are the only Internet audio/video delivery company with a
patent-pending, automated network. This distributed network
architecture allows the company to handle very high volumes of
simultaneous Internet users while ensuring first-rate delivery
of audio/video to users' computers. We like the fact that the 
$22.50 put is in the middle of a strong support area.

Apr  22.50  QYU-PX  Bid=0.81  OI=32  CB=21.69  ROI=10.79%

Chart = http://quote.yahoo.com/q?s=ITVU&d=3m
NDB - National Discount Brokers  $25.13   *** Internet Trading ***

NDB Group is the parent company of two financial services. NDB and
Sherwood Securities Corp. NDB currently has 125,000 accounts, with
assets near $6.5 billion. Sherwood Securities' main operations are
as a wholesale market maker in Nasdaq and small-cap securities.
NDB also owns a membership interest in Equitrade Partners LLC, a
specialist on the NYSE, that is also in acquisition negotiations
with Spear, Leeds, & Kellogg. Confused? Just look at the chart,
with support near $20, and remember how your trades get filled.

Apr  20.00  NDB-PD  Bid=1.06 OI=45  CB=18.94  ROI=17.42%

Chart = http://quote.yahoo.com/q?s=NDB&d=3m
PWAV - Powerwave  $27.06  *** Own This One! ***

PWAV designs, manufactures and markets ultra-linear RF power
amplifiers for use in the wireless telecom market. Their amps
increase the signal strength of wireless transmissions while
reducing interference. On 3/12, DLJ initiated coverage with a
"buy" rating. A new stock offering at $26.75 and some rumors
of a blow-out earnings report. Technicals are excellent and
the sold strike is below the recent trading range.

Apr  22.50  VFQ-PX  Bid=0.63  OI=0  CB=21.87  ROI=9.14%

Chart = http://quote.yahoo.com/q?s=PWAV&d=3m
RCNC - RCN Corp.  $31.31     *** First and Largest! ***

RCN Corporation is the nation's first and largest single-source,
facilities-based provider of communication services to residential
markets, the largest regional Internet service provider (ISP) in
the Northeast and one of the nation's largest ISPs. The company
is currently providing local/long distance phone, cable TV and
Internet services in several markets. Announced Thursday that it
had raised $1.25 billion in new financing to be used for new
construction in their state-of-the-art fiber optic network. The
bullish chart and recent all-time-high make this play favorable.

Apr  25.00  RBQ-PE  Bid=0.50  OI=48  CB=24.50  ROI=7.39%

Chart = http://quote.yahoo.com/q?s=RCNC&d=3m
ZD - Ziff-Davis  $25.06     *** Internet IPO ***

Ziff-Davis is the #2 US computer magazine publisher and a leading
worldwide provider of technology information. ZD produces some 80
publications including industry leader PC Magazine and PC Week.
Its ZDNet.com Web site offers industry news, product reviews, and
services. It also owns about 65% of ZDTV, a 24-hour cable channel
covering computers and the Internet. Last month said it will spin
off a stake in ZDNet, an IPO, and that market is "hot" right now!

Apr  17.50  ZD-PW  Bid=0.75  OI=552  CB=16.75  ROI=13.02%

Chart = http://quote.yahoo.com/q?s=ZD&d=3m

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