Option Investor

Daily Newsletter, Sunday, 03/28/1999

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The Option Investor Newsletter            Sunday  3-28-99  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 3-26          WE 3-19          WE 3-12           WE 3-5
DOW     9822.24 - 81.31  9903.55 + 27.20  9876.35 +140.27  +429.50 
Nasdaq  2419.17 -  2.10  2421.27 + 39.74  2381.53 + 44.42  + 49.08 
S&P-100  643.68 -  6.43   650.11 +  1.84   648.27 +  9.28  + 20.57 
S&P-500 1282.80 - 16.49  1299.29 +  4.70  1294.59 + 19.12  + 37.14 
RUT      393.92 -  2.66   396.58 -  1.80   398.38 +   .37  +  5.75 
TRAN    3260.11 - 78.37  3338.48 + 70.97  3267.51 - 45.28  +105.36 
VIX       25.83            25.84            25.81            25.12
Put/Call    .50              .53              .60              .61

The short holiday week ahead is filled with minefields.

The markets will only be open for four days this week with the
Good Friday holiday giving traders a rest. This week is loaded
with major economic events and a war that is not going well.
Check out the weekly calendar section of the newsletter for a
complete list of events. 

The major stumbling blocks economically start off with the new
home sales numbers on Monday, and the all important FOMC meeting
on Tuesday. The FOMC meeting is expected to be uneventful and
Greenspan is expected to leave interest rates unchanged. Still,
traders are not likely to want to bet heavily before the meeting
outcome is known. Wednesday the GDP for the fourth quarter will
be announced along with February factory orders. Thursday will
feature Personal Income and Spending and Construction Spending.
Traders are likely to lighten up here. With the March non-farm
payrolls due out Friday and the market closed Friday, they could
feel a serious need to go into the long weekend flat. This means
Thursday afternoon could be weak.

If you look at the stats above you will see that we finished 
down for the week in all areas even after the big midweek rally.
During the week the advance/decline line set a new low. A low
that even surpassed the low of the Oct-98 correction when the
Dow was at 7732. The divergence between the advancers/decliners
has not been this bad since August 1929. Ouch! 

So how can we only be only 178 points from Dow 10,000 and the 
internals be this bad? The main reason given is the move to blue
chip safety. The blue chips are the ones leading the indexes
higher and they are the most liquid. With the small caps and
the broader market slipping steadily downward managers are 
moving out of smaller stocks and sticking to the big names.
They are as worried as the retail investors but can't afford
to miss the boat if the D10K rally fires back up again. They
want to be invested but capable of selling quickly if the need

Another factor for the down market last week is cash flow. The
first two weeks of March were very strong in terms of cash
moving into stock funds. Over $16 billion was transferred.
This was the pre-D10k period. Most of this cash did not get
invested because managers wanted to see confirmation of a
move over 10K before sticking their necks out again. Last week
Trim Tabs reported an outflow from these same stock funds of
over $4 billion. Failure to close and maintain the rally over
10K put investors back into caution mode. Many funds are simply
holding the money and waiting for some confirmation. The weak
internals are not giving them confidence. I reported last week
that 38 of the last 44 days had more new lows than new highs
which is another bearish indicator.

I feel like I keep repeating myself over and over but we need
to be aware that all is not well in the markets. Appearances
can be deceiving. The Dow, Nasdaq and S&P are still moving up
when by all indications they should be moving down. Noted
analyst Barton Biggs expressed his consternation on Friday.
He said, "I am totally befuddled, all the indicators are 
negative but the market just keeps climbing". "The 30-50
stocks that continue to lead the indexes higher are 
obscenely overvalued." 

The war in Europe is not going well. A U.S. F117 Stealth
Bomber was shot down on Saturday. In the last eight years
the Iraq forces have not been able to accomplish what only
took four days in Kosovo. The American public, which was 
evenly divided about the war to start with, (44% for, 40%
against and 16% undecided), will definitely turn against it
as more planes are lost. Rumblings in Washington are now
mentioning the possibility of ground forces which will also
be very unpopular. Surgical air strikes give the appearance
of a quick, painless method of penalizing someone for doing
bad things. Ground troops mean long drawn out fighting with
many more casualties. Typically, the market goes down as we
prepare for a battle but then goes up as the fight starts.
That was the pattern last week also. If it appears, we could
be headed for an expansion the market could trend down.

We are also in the middle of the earnings warning period.
Next week could see many new warnings from multiple sectors.

Now that I have pointed out the bearish side let me also 
point out the bullish view. Typically the last week of a
quarter is "window dressing" week. This is when managers
try to put as much cash as possible into big name stocks
to dress up their portfolios for the quarterly reports.
This would normally push up prices. Also the last two
trading days of a month and the first five of the next
month are typically positive days. This is caused by 
regular monthly retirement account deposits being put to
work. And believe it or not, the two trading days prior to
a market holiday are normally positive days. All of these
positive trends can of course be nullified by global events,
interest rate increases (Tue) or earnings warning disasters.
These historical trends of course do not take into account 
fed meetings, wars and non-farm payrolls on a holiday.

Do you see why market forecasters are pulling their hair out?

Nobody knows what will happen in advance and anybody that 
says they do is lying. This is why we have to play the cards
the market gives us. If we don't like the hand dealt then 
we fold and wait for the next hand. Our advice for the week,
don't fight the tape. Determine direction before starting
new plays. Anticipate problems and react accordingly. Looks
like a good week for taking a quick profit and jumping out
again. The longer you are invested the better chance of 
having a bomb drop that costs you money.

Good Luck

Jim Brown 


Last Sunday the only open position I had was OEX puts
that I bought on the failed rally on Friday. Monday was
a flat day with negative internals so I held them into 
Tuesday. This was very rewarding with the Dow dropping
-285 points intraday. I sold too soon at -165 points
for a nice profit and started looking for the next up
move. The market had recovered somewhat by the close
after the brief drop into the 9600s. On Wednesday the
market again tried to sell off at midday but was met
by strong buying volume each time. The Nasdaq stocks
MSFT, EMC, SUNW, DELL and the larger Internets were
all showing bottoms intraday. CMGI was up strong early
(+$12) and even though the market was negative it was 
holding the majority of its gains. When the market bounced
off -48 at 3:00 and the ticks started improving I opened
a position in CMGI when it was +$6. The rally continued
on the Nasdaq and CMGI closed +$12. On Wednesday night
I researched the Nasdaq stocks and picked three I wanted
to play at the open on Thursday, AOL, EBAY, EMC. We all
know what happened Thursday morning. AOL and EBAY announced
an agreement and the market gapped open strongly on the
Nasdaq rally. The three stocks I wanted to play all
opened so strong I elected not to chase them. I took
advantage of the bounce to sell my CMGI too soon for
about a 50% profit. Total time held about three hours.
I never saw another opening for the stocks I wanted and
the market closed up +169 points. On Friday I expected
the Nasdaq to sell off after the +112 point two day
gain. I looked for a chance to play but as the day wore
on I decided to go into the weekend flat. The failure
to mount any kind of bargain hunting move in the afternoon
and the possibility of negative war events over the
weekend prompted me to buy some OEX puts again on the 
failed rally between 2:00 and 3:00. I kept thinking
about the negative possibilities and the negative breadth.
It was purely a speculation play and not based on any
fundamental other than the failed rally after 2:00.


Sold OEX  650 PUTS OEY-PJ @$22.00 cost 13.50 profit 8.50 +63%
Sold CMGI 160 CALL QGW-DL @$31.88 cost 22.63 profit 9.25 +41%




Cash Alternative

I have covered many strategies in the past. Some are more 
conservative, while some are very aggressive. It is OIN that 
says, "only play this call in a rising market!" If the market 
or sector isn't consistently rising or falling, depending on 
your market stance, you are in cash or very frustrated. For 
those of us that listen to Jim and his staff and stay in cash 
in this thinly advancing market (mostly volatile), what can we
to for our money? Unless you are one of the few that like that 
4%-5% money market fund return, you would rather be in the 
trenches and trading. 

Many of us wouldn't think to use a strategy like a Bull Put 
Spread in a volatile market. However, this strategy can be 
very beneficial if careful planning is utilized. I have covered
it once before as part of another article which covered price 
spreads. Therefore, I plan on covering it briefly. This is one 
of my favorites. Why? I like the idea of collecting money. A 
lot of traders have said that the option sellers are the ones 
that usually come out ahead in the long run. The Bull Put Spread
is also called a put credit price spread. The mechanics of the 
trade consist of buying the lower strike price put and 
simultaneously selling a higher strike price put for a net credit. 

It is important to find out from your brokerage house if you can
do these trades. Unfortunately, many firms require certain income,
net worth, trading experience, and capital requirements. In 
addition, a credit spread does require a margin requirement. All 
spreads must be done in your margin account. No, options aren't 
marginable. But you can purchase them with free cash. Excess free 
cash is available if your equity from marginable securities is 
greater than 50% of the total market value of those securities. 
In addition, free cash in your money market or cash account may 
be swept to cover any margin requirements you may have. 

The requirement is the difference between the two strike prices 
(usually 5 - 10 points) multiplied by the number of shares 
represented on one side of the spread. For example, a 5-point 
spread with 10 contracts on both sides (total of twenty) would 
require $5000 on deposit. The good thing is that the credit 
collected may be applied to the margin requirement. So if you 
collect a net credit of $1250, the cash required from your 
account would equal $3750. $1250 + $3750 = $5000.

I have a couple of tips to follow. First, pick an up trending 
or at least a consolidating stock. Depending on your risk 
tolerance, you may wish to sell the put as far out of the money
as you can while still collecting a decent credit. This gives 
you a little breathing room. Some more aggressive investors may 
sell the put either at the money or in the money to realize a
greater INITIAL return. Try to collect at least a $1 credit. 
$1000 credit divided by the $4000 cash required is a 25% return. 
Another tip is to only do these one month at a time. I recommend
this because it is very difficult to determine what the market 
will do from day to day let alone week to week or month to month. 
Those of you who are selling puts in order to collect the money 
or own the stock at a lower cost basis need to calculate how many
different positions you could do with the same margin capital 
requirements. It may be beneficial to spread out the risk over a 
few key sectors or stocks. There are various ways to determine a 
securities support level. Use your way to find it and try to 
collect a good credit by selling the put close to that price 
level. Finally, sometimes traders will give a 1/8 or  on either 
side if the options have a lot of activity. Sometimes it doesn't 
hurt to try to get a little extra by target shooting. But don't 
get greedy. Happy trading.

I hope this has helped you. I always enjoy hearing your comments 
and suggestions. If there are some topics you would like to have 
discussed please contact me. 

Note: This article is for information and educational purposes 
only and by no means is recommending trading such strategies. 
Please refer to the disclaimer at the end of the newsletter.

Robert J. Ogilvie 
Phone: 1-800-982-2119 
Email: RJOgil@aol.com

He is an Investment Broker and Registered Options Principal with
Baxter, Banks & Smith, Ltd., a full service firm in Sarasota, FL. 
He specializes in various portfolio hedging and option trading 
strategies using both equity and index options, especially the 
OEX and SPX. 

Market Sentiment - By Pinnacle Capital Advisors

Has the Train left Yet?

Many investors buy a dip because they fear that the train will 
depart leaving investors standing behind.  After reviewing the
Bullish and Bearish signs outlined below, ask yourself if you
want to be on this train or wait until the odds are stacked up 
in your favor.

Just because you get a dip, doesn't mean to buy it.  Things 
change from one dip to the next - key technical reversals,
advance/decline lines, interest rates among others. What's more,
the short week ahead includes two key economic events (FMOC
meeting on Tuesday (3/30) and an employment report on Friday
4/2) not to mention continued air strikes in Kosovo.     

From a technical and sentiment viewpoint, this week will tell us 
much about the likely direction of the broader market over the
near-term.  After a short relief rally on Wednesday and Thursday
(3/24-25), does Friday's (3/26) sell-off represent a lower high
which many will be calling a failed rally next week?  Will
option speculators throw caution to the wind and buy deep out
of-the-money (OTM) call options? Stay tuned! 


Top Reversal              Several industry sectors revealed 
                          Tweezer top candlestick formation on 
                          Friday (3/19)

Peak Open Interest        April's peak open interest - .87

Interest Rates            Bouncing off 200dma and holding above
                          important 5.50% level (5.596%)

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

Advance/Decline Line      Deteriorating A/D line. 

Pinnacle Index            Climbing for S&P 100


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

OTM Call Analysis

Shown below is an analysis of 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) and Tuesday (3/23).  

As we move into April's expiration cycle, Pinnacle is tracking 
the level of call buying (OTM) between 650-700 among option
speculators.  Notice the jump in the OTM call open interest
during the last sell-off.

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         -
Tuesday, March 23           48,953      +37.4%    
Thursday, March 25          59,266      +66.4%    
Friday, March 26            60,266      +69.2%     *

Market Sentiment at a Glance
                                Friday     Tues      Thurs  
Indicator                       (3/26)     (3/30)    (4/1) Alert

Pinnacle Index (OEX):          
Overhead Resistance (650-665)     1.9    
Underlying Support  (625-640)     1.6

Put/Call Ratios:
CBOE Total P/C Ratio               .5
CBOE Equity P/C Ratio              .4                        *   
OEX P/C Ratio                     1.0                        *                

Peak Open Interest (OEX):
Puts                              630
Calls                             700
P/C Ratio                         .87

Market Volatility Index (VIX):	
CBOE VIX                        25.83                        *

Investors Intelligence:
Bullish                         55.9%                        *  
Bearish                         29.7%                        *

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                       (3/26)       (3/30)     (4/1)
                    (660-665)      4.8
                    (650-655)      1.1
Overhead Resistance (650-665)      1.9

OEX Close                       643.68  

Underlying Support  (625-640)      1.6
                    (635-640)      1.4
                    (625-630)      1.7

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 relatively firm at the
OEX 625/640 level.

Put/Call Ratio 
                                Friday      Tues       Thurs
Strike/Contracts                 (3/26)     (3/30)      (4/1)
CBOE Total P/C Ratio               .52
CBOE Equity P/C Ratio              .39
OEX P/C Ratio                     1.00

Peak Open Interest (OEX)
                     Friday         Tues           Thurs
Strike/Contracts     (3/26)         (3/30)         (4/1)
Puts                 630 /  9,182
Calls                700 / 10,557
Put/Call Ratio       .87



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 26, 1999                          25.83          

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     
March 24, 1999                        55.9        29.7  *   

Market Posture
As of Market Close - Friday, March 26, 1999 

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

DOW Industrials    9,500  10,000   9,822    Neutral   3.19
SPX S&P 500        1,250   1,325   1,283    Neutral   3.19
OEX S&P 100          630     660     644    Neutral   3.19
RUT Russell 2000     400     435     394    BEARISH   3.12

NDX NASD 100       2,000   2,100   2,067    Neutral   3.25
MSH High Tech        900   1,000     985    Neutral   3.19

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
XCI Hardware         800     900     865    Neutral   3.5
CWX Software         600     650     648    Neutral   3.5
SOX Semiconductor    350     420     364    Neutral   3.5
NWX Networking       420     450     437    Neutral   3.4
INX Internet         500     580     579    Neutral   2.19

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
BIX Banking          650     710     671    Neutral   3.19
XBD Brokerage        700     825     800    Neutral   3.19
IUX Insurance        600     655     629    Neutral   3.19

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
RLX Retail           875     940     903    Neutral   3.19
DRG Drug             775     835     794    Neutral   3.25
HCX Healthcare       775     835     793    Neutral   3.25
XAL Airline          340     365     340    BEARISH   3.26 *
OIX Oil & Gas        250     260     259    Neutral   3.19

Posture Alert

The equity market ended a volatile week in lackluster 
fashion over concerns surrounding Kosovo and earnings
prospects. After the jump in crude futures, we have turned
BEARISH again on Airlines sector following its failure to
stay above a key benchmark.

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


Coming Events

New Home Sales    Feb      Forecast:  922k   Previous: 918k  


API Oil Stocks    3/27     Forecast:  --     Previous: 823k  
APICS Survey      Mar      Forecast:  --     Previous: 50.8  
BTM Schroders     3/27     Forecast:  --     Previous: 0.5%  
Consumer Confidenc Mar     Forecast:  --     Previous: 132.1 
LJR Redbook       3/27     Forecast:  --     Previous: 0.4%  


GDP                Q4-Fnl  Forecast:  6.1%   Previous: 6.1% 
Factory Orders     Feb     Forecast:  -0.9%  Previous: 1.7%
Chicago PMI        Mar     Forecast:  --     Previous: 52.9


Jobless Claims    3/27     Forecast:  --     Previous: 289k 
Personal Income    Feb     Forecast:  0.4%   Previous: 0.6% 
Personal Spending  Feb     Forecast:  0.6%   Previous: 0.3%
NAPM               Mar     Forecast:  51.9%  Previous: 52.4%
Money Supply(M2)  3/22     Forecast:  --     Previous: $1.6B
Construction Spend Feb     Forecast:  0.4%   Previous: 1.6%  


Non-Farm Payrolls  Mar     Forecast:  180k   Previous: 275k  
Unemployment Rate  Mar     Forecast:  4.4%   Previous: 4.4%  
Average Hourly Ern Mar     Forecast:  --     Previous: 0.1%  
Average Work Week  Mar     Forecast:  --     Previous: 34.7hrs

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valuable resource.

You can get a free trial from Interquote at this address.



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You may also fax the information to: 303-797-1333

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              3-28-99
Sunday                   2  of  6

Last weeks change for this weeks picks:

Index    Last  Week
Dow    9822.24 -81.31
Nasdaq 2419.17 - 2.10
$OEX    643.68 - 6.43
$SPX   1282.80 -16.49
$RUT    393.92 - 2.66
$TRAN  3260.11 -78.37
$VIX     25.83   1.99

Stock  Price   Week

QCOM  111.56  27.00  Deal with ERICY makes investors happy!
MSFT  178.13   6.95  Beware post split downs!  Go for settlement!
AOL   125.69   6.56  NSCP merger finally over.  New deal with eBay
SUNW  116.50   6.12  Splits 2:1 on April 8th
TLAB   97.19   5.07  Setting new highs.  Split candidate
EMC   122.88   4.62  Hot stock, look for entry point
ALD    50.38   4.44  Strong trend and new deals
WHR    53.06   4.07  If MYG can do it, so can WHR
OMC    77.50   3.57  Setting a string of new highs
SCH    93.00   3.37  Split candidate, expecting strong earnings
DCLK  182.25   2.50  Splits 2:1 on April 5th.  *Play both sides
G      63.56   1.56  Set a new high, affordable options
MWD   102.63   1.00  Earnings blow out, looking for split 4/9/99
AHP    66.69   0.89  Approaching its highs again
FSR    92.94   0.31  Splits 3:1 on April 15th.  Still waiting for run
LOW    63.81   0.07  Confirm direction before playing
PVN   107.69 - 0.06  Profit taking over, reversal in progress
C      63.38 - 0.87  Dropped, not moving
WCOM   89.88 - 1.62  New price target is $110
CMGI  182.38 - 1.68  What a play!  Wait for direction on Monday.
MER    88.75 - 2.00  Takeover candidate, Brokers are strong
INSS   64.56 - 2.19  We are stilling waiting for the bounce UP
WMT    91.56 - 3.18  Splits 2:1 on April 19th.
GE    107.81 - 4.19  Consolidating, ready to run again
BVSN   59.75 - 6.25  Profit taking over?  Look for confirmation
RFMD   83.75 -11.38  Splits 3/31, wait for upward confirmation
RNWK  120.00 -21.75  Profit taking appears over.  Ready for new run?


ELN    66.56  -8.88  New put, Concern over new drugs too much
LLY    84.44  -3.00  Competition to take marketshare
EMR    54.38  -2.12  Everything points down
CMB    80.50  -2.00  FED meeting and War uncertainities=down
LHSG   35.88  -1.76  New coverage fails to excite anyone
NEON   58.25  -0.75  Dropped
CTXS   40.13  -0.60  Dropped, Split excitement too much
GIS    74.31   0.32  Can't hold any gains
WPI    39.63   1.13  New put, Giving us the entry point.  Confirm move


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.



PVN  - Providian Financial
SUNW - Sun Micro
ALD  - Allied Signal
DCLK - Double Click


WPI  - Watson Phar.
ELN  - Elan Corp

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.


C $63.38 (-0.87) It's hard to keep recommending a play 
that's been down 2 weeks in a row.  While we still believe 
in the strength of Citigroup compared to its peers, we 
expect financial stocks to be under the yellow flag prior 
to Greenspan manning the microphone March 30 (announcement 
approx. 14:15 ET).  While no one expects an increase in 
rates from this meeting, the Fed is still biased toward 
rate increases and no one wants to be surprised by a Fed 
tightening.  Investors will sit on the sidelines awaiting 
further direction.  Accordingly, we are dropping C for now.  
If you are currently holding C, we are not recommending you 
exit the play at all costs, but that you take your profits 
sooner rather than later and don't start any new financial 
plays until "Alphonso" clears the air.


NEON $58.25 (-0.75)  It appears NEON doesn't want to test 
waters below the 51.25 mark it hit on Wednesday.  The gain 
on Thursday is understandable considering the stunning 69 
point advance of the Nasdaq, but there are no excuses - 
or news - for its +3.25 climb on Friday.  It's always a 
mistake to bet against the trend and for that reason we're 
dropping NEON. 

CTXS $40.13 (+1.25)  We expected a post-split depression on 
Friday and didn't get it.  Not even in an uncertain market! 
Investors liked the news of their alliance with iBiz 
Technology Corp and the stock gained +3.06 to close near its 
high for the day.  The conditions have evidently changed and 
we can no longer recommend CTXS as a possible put play. 


VOD  - Vodaphone
MWD  - Dean Witter
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  

LU   - Lucent          2:1 03-31-99 ex-date 04-01
VIA  - Viacom          2:1 03-31-99 ex-date 04-01 
NEG  - Energy East     2:1 04-01-99 ex-date 04-05
DCLK - Double Click    2:1 04-02-99 ex-date 04-05 current play
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 current play
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 
CMGI - CMGI Inc        2:1 05-27-99 ex-date 05-28 current play
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 ! 

DCLK - DoubleClick Inc. $182.25 (+2.50)(+48.75)(+11.25)

DCLK set an all time high of $200 this past Monday, March 
22nd.  However, the market's volatility has since caused the 
stock price to adjust back down to $182.25.  We feel this is 
a chance to buy on the dip.  DCLK could explode this week in 
light of the fact that it will split on Friday April 2nd and 
start trading at the new split price on Monday April 5th.  
This is only a four day call play since we recommend selling 
your calls on Thursday or earlier.  7 out of 10 companies 
suffer from post split depression.  We will add it as a put 
play after it splits based on those numbers.  This is a prime 
example of playing both sides of the coin.  Play DCLK as a 
call in the few days before the split on split momentum.  Play 
DCLK after it splits due to post split depression. 

*How do you do this?  If this play fits your style and risk 
profile, you can decide to buy calls for the possible split
run between Monday and Thursday (markets are closed on Friday).
Then, if we get a sufficient run up, you can buy puts on
DCLK late Thursday afternoon (after selling your calls if you
haven't yet) to try and capture any post split depression the 
following week.

See details in sector list

Chart = http://quote.yahoo.com/q?s=DCLK&d=3m
RFMD - RF Micro Devices $83.75 (-11.38)(+9.82)

Stock Splits 2:1 Mar-31st

See details in sector list

Chart = http://quote.yahoo.com/q?s=RFMD&d=3m
SUNW - Sun Microsystems, Inc. $116.50 (+6.12)

SUNW splits 2-1 on April 8th.  

See details in sector list

Chart = http://quote.yahoo.com/q?s=SUNW&d=3m
INSS - International Network Services $64.56 (-2.19)(+3.25)

Stock Splits 3:2 04-05-99 

See details in sector list

Chart = http://quote.yahoo.com/q?s=INSS&d=3m
FSR - Firstar Corp $92.94 (+0.31)(+0.38)

Stock splits 3:1 04-15-99

See details in sector list

Chart = http://quote.yahoo.com/q?s=fsr&d=3m
WMT - Wal-Mart $91.56 (-3.19)(-1.63)(+3.13)(+9.25P5W)

Stock Splits 2:1 04-19-99 

See details in sector list

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



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

SUNW - Sun Microsystems, Inc. $116.50 (+6.12)

See plays in sector list

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

DCLK - DoubleClick Inc. $182.25 (+2.50)(+48.75)(+11.25)

See plays in sector list

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


ELN - Elan Corps Ads $66.56 (-8.88) **put play**

See details in sector list

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

Brokerage/Banking - Sector

FSR - Firstar Corp $92.94 (+0.31)(+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 720 branches in 9 states 
and target the mid-western market.

This stock is definitely swayed by market sentiment. But FSR
demonstrated its strength and stability this week. It's given 
up very little when the Dow took its dives and made some 
advances when it rallied. FSR traded in about a 4 point range 
hinting it may try and break through its resistance at around 
$94. FSR is perched right on its 10 dma and we need a bounce 
to keep it on our list.  Confirm direction before starting a 
new position.

No news to report, but recall this is a short-term split play.  
A 3:1 stock split is scheduled for April 15th and we're 
anticipating some pre-split excitement to give FSR a boost.

BUY CALL APR- 90 FSR-DR OI= 844 at $4.50 SL=2.75
BUY CALL APR- 95*FSR-DS OI=1609 at $2.06 SL=1.00
-no activity on APR-100s
BUY CALL JUN- 95 FSR-FS OI= 393 at $5.38 SL=3.75
BUY CALL JUN-100 FSR-FT OI= 922 at $3.63 SL=1.75

Picked on March 18th at  $95.56   PE = 47
Change since picked       -2.62   52 week low =$54.18
Analysts Ratings      6-8-3-0-0   52 week high=$95.56
Last earnings     12/98 est .72   actual .72
Next earnings     04-13 est .77   versus .63
Average Daily Volume = 897.9 K
Chart = http://quote.com/q?s=FSR&d=3m


PVN - Providian Financial $107.69 (-.06)

Providian Financial provides credit, investment services, and 
insurance protection to individual consumers. It is the 
nation's top secured card provider, and is also a leading 
Visa and Mastercard provider. In addition, it recently bought 
GetSmart, giving it an e-commerce loan division. Headquartered 
in San Francisco, PVN still provides traditional banking 
services in its home state of New Hampshire.

We recommended PVN earlier this year, and enjoyed over $20.00 
of gains during the play. We dropped it 2 weeks ago after the 
stock reached $118.44 and then began to correct. It had gotten 
ahead of itself and valuation became an issue. When the market 
weakened, PVN went south. We were watching for a bottom, which 
occurred on 3-24 at $99.06. From there, it bounced off its 
50 dma and has continued up the next 2 days. This is a very 
bullish indication for PVN, and once this stock starts rolling, 
momentum is quick to build. (Just take a look at its chart.) 
Although its PE is high, the company believes 50% earnings 
growth is possible this year and one fund manager believes it 
could be even higher. Its price to earnings GROWTH is not 
out of line.

We believe that its recent pullback provides a good general 
entry point for PVN options. Earnings are not expected for over 
3 weeks and an earnings run is probably a week or more in the 
future, so take time to choose the best point to jump in. 
Remember that what Greenspan says (and even what people think 
he says) can greatly affect the market. PVN is one of the top 
10 credit card issuers in the U.S. and its business is loans, 
so any perception of a change in interest rates will show up 
in this stock's price.

Monday might be a good entry point, but that is a personal
decision.  Greenspan's FED meeting on Tuesday could have
a big effect on banks, if he is negative, they will fall fast!

BUY CALL APR-105*PVN-DA OI=106 at $ 7.38 SL=5.50
BUY CALL APR-110 PVN-DB OI= 96 at $ 4.63 SL=3.00
BUY CALL MAY-110 PVN-EB OI=  5 at $ 8.88 SL=6.75
BUY CALL JUN-110 PVN-FB OI= 97 at $11.00 SL=8.75

Picked on Mar 28 at  $107.69      PE = 52
Change since picked +$  0.00      52 week low =$ 28.38
Analysts' ratings  6-6-2-0-0      52 week high=$118.44
Last earnings 12/98 est 0.62  actual 0.66 surprise=6%
Next earnings 04-22 est 0.72  versus 0.39
Average daily volume = 835.6 k
Chart = http://quote.yahoo.com/q?s=PVN=3m

MWD - Morgan Stanley Dean Witter $102.63 (+1.00)(+.50)(+2.19)

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).

MWD started the week with a $5.25 loss on Monday, but made
up for it with a $5.50 gain on Thursday.  The large gain
came from blowout earnings, some $.40 higher than expected.
We did not see a stock split announcement, so this is another
event that could propel MWD even higher.  MWD's 30-dma ($96) 
has held as nice support and again held on Wednesday.  There
is a good chance that there will be some earning estimate
upgrades this next week.  Watch for intra-day dips to purchase
new calls.

MWD's shareholder meeting is scheduled for April 9th.  This
seems to be the most likely time for a possible stock split 

BUY CALL APR-100 MWD-DT OI=2422 at $ 6.25 SL=4.25
BUY CALL APR-105*MWD-DA OI=1353 at $ 3.75 SL=2.25
BUY CALL JUL-100 MWD-GT OI=1743 at $12.50 SL=9.75 
BUY CALL JUL-105 MWD-GA OI= 178 at $10.00 SL=7.50

Picked on Feb. 6th at     $89.00   PE = 17
Change since picked       +13.63   52 week low =$ 36.50 
Analysts Ratings       5-4-4-0-0   52 week high=$104.81
Last earnings     03/99 est 1.34   actual 1.76
Next earnings     06-26 est 1.34   versus 1.37
Average daily volume = 2.10 mln
Chart = http://quote.yahoo.com/q?s=MWD&d=3m


SCH - Charles Schwab $93.00 (+3.37)(+5.63)(P4W+14.94)

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. In February, SCH took on $9.4 bln in new customer 
assets, following an $8.8 bln increase the month before. 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. greatly increased trading 
capacity and their new Signature Service for their best 
customers). P/Es in the online brokerages are high and reflect 
online trading growth expectations. As long as online trading 
continues to grow, this market leader will grow with it.

After MWD's blow out earnings announcement, investors sent 
this online trading leader to a new intra-day high of $94.88 
on Friday and a record close of $93.00. Earnings are due out 
in a couple of weeks, and that may send the stock higher as 
well. Schwab expects to earn $.31 to $.34/share. Analysts 
consensus was just revised upward to $.31. SCH is in split 
territory and looking good to continue moving up, but beware 
of occasional bouts of profit taking along the way. 
BUY CALL APR- 90 SCH-DR OI=2256 at $6.50 SL=4.75
BUY CALL APR- 95*SCH-DS OI=1068 at $3.88 SL=2.25
BUY CALL APR-100 SCH-DT OI= 914 at $2.06 SL=1.00
BUY CALL MAY- 95 SCH-ES OI= 142 at $7.75 SL=6.00
BUY CALL JUN-100 SCH-FT OI= 267 at $7.25 SL=5.50

Picked on Feb 21 at   $69.06       PE = 100
Change since picked  +$23.94       52 week low =$18.50
Analysts Ratings   2-0-6-0-0       52 week high=$92.81
Last earnings 12/98 est 0.23   actual 0.26 surprise=+13%
Next earnings 04-15 est 0.31   versus 0.17
Average daily volume = 2.06 mln
Chart = http://quote.yahoo.com/q?s=SCH&d=3m




The Option Investor Newsletter          3-28-99
Sunday             Part 3 of 6

MER - Merrill Lynch $88.75 (-2.00)(+3.50)(+18.12 P4W)

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.

On March 4, shortly after investors began rotating into the 
brokerage sector, MER surged past earlier resistance at $80.00 
following an upward earnings revision by Soloman Smith Barney. 
It climbed 5 weeks in a row before giving back some gains in 
last week's market correction. MER recently reversed a policy 
against online trading and purchased L.P. (DESoFT), a developer 
of Internet technology for financial institutions. One in 7 
trades is now done online and MER can't afford not to offer 
Internet trading. Plus, news has been consolidation in the banking 
industry. Chase Manhattan(CMB) is looking for an acquisition 
that will add underwriting and other investment services to 
its current offerings, and speculation is centered on MER as 
the merger favorite.

The big upside earnings surprise from Morgan Stanley Dean 
Witter(MWD) sent the brokers higher on expectations that 
they, too, will outperform estimates. Weighing MER down is a 
lawsuit stemming from the company's alleged involvement in 
the 1994 Orange County bankruptcy. Although MER has already 
settled with the county for $420 mln, it is now being sued by 
individuals who did not join the county's suit. If an appeal 
to the California Supreme Court fails, it could expose MER to 
damages of as much as $240 mln more. Still, the brokerage 
sector remains strong, and MWD's earnings news, coupled with 
a rumored possible offer from CMB, should send this stock 
higher. Earnings are expected in about 2 weeks. 

BUY CALL APR-85*MER-DQ OI=8030 at $6.23 SL=4.50
BUY CALL APR-90 MER-DR OI=5014 at $3.88 SL=2.50
BUY CALL APR-95 MER-DS OI=4987 at $2.00 SL=1.00
BUY CALL MAY-90 MER-ER OI= 668 at $6.63 SL=5.00
BUY CALL MAY-95 MER-ES OI= 480 at $4.50 SL=2.75

Picked on Feb 28 at   $76.75       PE = 29
Change since picked  +$12.00       52 week low =$ 35.75
Analysts Ratings   4-2-6-0-0       52 week high=$109.13 
Last earnings 12/98 est 0.63   actual 0.86 surprise=+37%
Next earnings 04-13 est 1.13   versus 1.30
Average daily volume = 3.22 mln
Chart = http://quote.yahoo.com/q?s=MER&d=3m


DCLK - DoubleClick Inc. $182.25 (+2.50)(+48.75)(+11.25)

DoubleClick is the global Internet Advertising Solutions 
company.  They specialize in developing the solutions which 
make advertising work on the Internet for Web publishers and 
Web advertisers mainly through its DART Service.   DCLK has 
operations in Asia, Australia, Canada, Europe, Latin America, 
and of course, the US.  Some of their current customers 
include Microsoft, AT&T, and IBM.  

DCLK set an all time high of $200 this past Monday, March 
22nd.  However, the market's volatility has since caused the 
stock price to adjust back down to $182.25.  We feel this is 
a chance to buy on the dip.  DCLK could explode this week in 
light of the fact that it will split on Friday April 2nd and 
start trading at the new split price on Monday April 5th.  
This is only a four day call play since we recommend selling 
your calls on Thursday or earlier.  7 out of 10 companies 
suffer from post split depression.  We will add it as a put 
play after it splits based on those numbers.  This is a prime 
example of playing both sides of the coin.  Play DCLK as a 
call in the few days before the split on split momentum.  Play 
DCLK after it splits due to post split depression. 

*How do you do this?  If this play fits your style and risk 
profile, you can decide to buy calls for the possible split
run between Monday and Thursday (markets are closed on Friday).
Then, if we get a sufficient run up, you can buy puts on
DCLK late Thursday afternoon (after selling your calls if you
haven't yet) to try and capture any post split depression the 
following week.

News:   This past Thursday DCLK announced that it will help 
software-based ad customers avoid financial woes when they 
upgrade their computers and software.  DCLK is now offering 
a program to buy computer equipment and offer credits.  DCLK 
was also busy this week forming advertising agreements with 
companies like Road Runner and Infoseek.  It also announced 
a "partnership with Comcast to develop solutions for 
high-speed online service providers." (-MarketScope)

BUY CALL APR-180*QWE-DP OI=746 at $24.25 SL=19.00
BUY CALL APR-185 QWE-DQ OI=191 at $22.13 SL=17.00
BUY CALL APR-190 QWE-DR OI=407 at $19.75 SL=15.50
Picked on March 9th at $182.25      PE= N/A
Change since picked     +$0.00      52 week low =$ 13.50
Analysts Ratings     3-4-0-0-0      52 week high=$200.00
Last earnings 01/99 est  0.00   actual -0.25  
Next earnings 04-22 est -0.26   versus -0.31
Average Daily Volume = 2.12 mln
Chart = http://quote.yahoo.com/q?s=DCLK&d=3m


AOL - America On Line $125.69(+6.44)(+23.12)(P5W+14.13 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.  AOL is now the 
proud owner of Netscape.   Revenues should exceed $4.5 
billion in FY99, up from $2.6 billion in FY98.

After digesting Netscape, AOL is off and running like a 
champ.  Aside from the pink slips handed out to an 
unfortunate 1000 people in overlapping positions, Wall 
Street cheered the news bidding AOL up on strong volume 
last week, Friday's volume excepted.  Technically, the 
chart is positive and trading above its 10 dma.  With the
dust settling, and a fairly large divergence north of its 
30 and 50 dma, we may see a few days of consolidation 
before AOL resumes its ascent.  Resistance is $130.50.  
It's hard to believe that after 2 splits in the last 6 
months, AOL is in split territory again, but it is.  There 
are only enough shares authorized for a 3:2; a 2:1 will 
require a shareholder vote.  Anyone object?  Earnings 
aren't until April 27.  Confirm upward movement before 
playing and remember to use stops to protect your profits.

Last week, e-bay said it would pony up $75 million for 
prominent placement on all AOL sites for a 4-year period.  
It's non-exclusive though, as AOL will still advertise 
other auction sites uBid, Onsale and Bid.com.  A crossfire 
of upgrades and downgrades were awarded to AOL.  There were 
fewer downgrades and they were based on price targets being 
reached or overvaluation.  In the end, Wall Street cheered.

BUY CALL APR-120 AOO-DD OI=10023 at $11.25 SL= 8.75
BUY CALL APR-125*AOO-DE OI= 9231 at $ 8.38 SL= 6.25
BUY CALL APR-130 AOO-DF OI=15352 at $ 6.00 SL= 4.25
BUY CALL JUL-130 AOO-GF OI= 6080 at $18.50 SL=14.50

Picked on March 14 at $96.13         PE = 575 (really!)
Change since picked   +29.56         52 week high=130.50
Analysts Ratings  23-7-0-0-0         52 week low =15.56
Last Earnings 01/99  est .09 actual .09 surprise =0%
Next Earnings 04-21  est .09 versus .04
Average daily volume =  25.4 mln. (skewed by recent split)
Chart = http://quote.yahoo.com/q?s=AOL&d=3m

CMGI - CMG Informational Services $182.38 (+1.18)

CMGI is a direct market service provider which invests in, 
develops and integrates advanced internet, interactive and 
database management technologies.  The company and its 
subsidiaries offer a wide variety of direct marketing 
services including internet and interactive media direct 
marketing software technologies, literature fulfillment and 
turnkey outsourcing and business-to-business telemarketing 
services.  The company also offers accurate mailing lists, 
database management, design and development capabilities, 
consultative list management and brokerage services. 

CMGI had a nice end to its week.  We picked CMGI up on 
Tuesday and Wednesday and Thursday saw nice gains.  The week
ended with CMGI losing $5.06.  CMGI's chart looks like a 
consolidation has taken place and the stock is ready to
head higher.  CMGI's chart has also shown a narrowing
effect, sometimes called a triangle.  The idea is that
as the stock price range gets narrower and narrower, the
stock is ready to make a big move.  The other indicators
show this move should be up.

No current news on CMGI, but watch the news for anything
dealing with the Lycos/USA deal.  CMGI has been a huge
thorn in this deal being accomplished.  CMGI doesn't feel
that USA offered enough for Lycos.  CMGI is the largest 
shareholder in Lycos.

BUY CALL APR-180*QGW-DP OI=636 at $16.63 SL=12.50
BUY CALL APR-185 QGW-DV OI=469 at $14.13 SL=10.75
BUY CALL APR-190 QGW-DW OI=754 at $12.00 SL= 9.50
BUY CALL MAY-185 QGW-EV OI= 25 at $26.38 SL=20.50
BUY CALL MAY-190 QGW-EW OI= 59 at $24.13 SL=18.50

Picked on Mar 23rd at $164.00   PE = 701
Change since picked    +18.38   52 week low =$ 13.52
Analysts Ratings    2-5-1-0-0   52 week high=$226.00
Last Earnings 03/99  est -.23   actual .28 surprise +222% 
Next Earnings 06-12  est -.20   versus .00
Average daily volume = 3.91 mln.
Chart = http://quote.yahoo.com/q?s=CMGI&d=3m


RNWK - RealNetworks $120.00 (-21.88)(+46.63)(+5.83)(P2W+26.37)

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. (-Hoovers)

RNWK experienced some heavy profit taking this last week.
This is to be expected after the quick, steep gains RNWK
has made.  We don't see this as being a continued sell-off.
RNWK did battle back on Thursday and Friday, and market
permitting, looks ready to continue higher.  The rumors are
still around that RNWK is a likely takeover candidate.  As
always, Internet plays are risky, but we have also received
huge rewards.  Great stock to target shoot.  Pick a price
that you think might be hit intra-day.  Looking at a chart
is the best way to see the best price.

RNWK announced that they will be providing Intel with their
RealPlayer G2 as the main streaming media player on Intel's
Pentium III WebOutfitter service.  This is just another
deal that RNWK has obtained.  They are continuously reaching
agreements with the computer industries big hitters.

BUY CALL APR-120*QRN-DZ OI=361 at $15.00 SL=11.75
BUY CALL APR-125 QRN-DU OI= 56 at $13.63 SL=10.50
BUY CALL APR-130 QRN-DV OI=114 at $11.88 SL= 9.25 
BUY CALL MAY-130 QRN-EV OI= 62 at $19.25 SL=15.00

Picked on Feb. 27th at  $70.13   PE = n/a
Change since picked     +49.87   52 week low =$ 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 = 1.12 mln
Chart = http://quote.yahoo.com/q?s=RNWK&d=3m


RFMD - RF Micro Devices $83.75 (-11.38)(+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 last summer. In early March, 
Credit Suisse First Boston raised its earnings estimates 2 
cents and then on March 31, RFMD announced a 2-for-1 stock 
split. The split will occur on March 31 or thereabouts for 
shareholders of record March 17. This company is engaged in 
a business that will grow considerably in the near future, 
but the reason we chose this play is the expected split run.
*(note: payable date for the split is March 31st, and the 
Ex-date has been set for Thursday, April 1st.)

RFMD has cheated us out of a split run so far. It has had a 
tremendous run-up and the downdraft in the market resulted 
in a lot of profit taking. RFMD could still have a good 2 day 
jump before the split, but only if the overall market is rising. 
Use stops on this one--if it climbs higher and then begins to 
pull back before the split, profit taking could bring it back 
down in a hurry. Confirm upward movement in the stock before 
playing! Splits this Wednesday.

BUY CALL APR-85*RQZ-DQ OI=110 at $7.25 SL=5.50
BUY CALL APR-90 RQZ-DR OI=303 at $5.13 SL=3.25
BUY CALL MAY-90 RQZ-ER OI= 83 at $9.38 SL=7.00 

Picked on Mar 21 at   $95.13     PE = n/a
Change since picked  -$11.38     52 week low =$ 10.50
Analysts' ratings  6-2-0-0-0     52 week high=$103.75
Last earnings 12/98 est 0.22 actual  0.31 surprise=40%
Next earnings 04-21 est 0.37 versus -0.21
Average daily volume = 364 K
Chart = http://quote.yahoo.com/q?s=RFMD=3m


QCOM -  QUALCOMM Inc. $111.56 (+27.00)(+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.

Unbelievable!!  Simply unbelievable!!  QCOM and Ericsson 
finally agreed to settle their differences and work together 
to develop global CDMA technology.  This means we could soon 
see a whole new generation of digital wireless phones.  
Investors were obviously overjoyed with the announcement.  The 
stock rose +$11.06 on Thursday.  The fact that QCOM added even 
more with a +$13.13 explosion on Friday was simply amazing!!  
The company set another all time high in intraday trading at 
$119.94 (+21.51 on Friday morning).  It is now so important 
that you set your stop losses.  The war in Kosovo and the Fed 
meeting on Tuesday could cause some uneasiness.  It would be a 
shame to lose due to carelessness.  Logic would dictate you
look for a pullback before jumping.  This is primed for some
profit-taking.  Try not to pick the bottom.

News:  Remember that QCOM is one of our split candidates.  It 
split back in 1994 at the $60 level.  It has plenty 
of authorized shares for another 2:1 split.  S&P maintains 
their "buy" on the company while Everen Securities repeated 
their "outperform" rating.
Wait for a pullback!
BUY CALL APR- 95 QAQ-DS	OI=1674 at $18.88 SL=14.50 
BUY CALL APR-100*QAQ-DT OI= 979 at $15.00 SL=11.75
BUY CALL MAY-100 QAQ-ET OI= 262 at $18.13 SL=14.00
Picked on March 9th at $79.75      PE= 68
Change since picked   +$31.81      52 week low =$ 37.75
Analysts Ratings    5-5-6-0-0      52 week high=$119.94
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 = 1.76 mln
Chart = http://quote.yahoo.com/q?s=QCOM&d=3m


WCOM - MCI WorldCom, Inc. $89.88 (-1.62)(+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.

As we thought, WCOM bounced up off its 30 dma back on Wednesday 
and then jumped again on Thursday.  But when Friday rolled 
around, investors were happy to close some positions ahead of 
the weekend and WCOM dipped slightly.  WCOM has a lot of 
potential to rise higher.  However, the markets are easily 
spooked.  With the uncertainties of war combined with the Fed 
meeting this Tuesday, we suggest waiting before initiating any 
new plays in WCOM.  It is smarter to hold out for an entry 
point until the uncertainties are resolved than to dive in too 
soon and watch helplessly as your dollars dwindle.    

News:  NationsBanc Montgomery Securities raised its price 
target for WCOM to $110 a share from the previous $95 level 
and reiterated their buy rating.  They expect gross profit 
margins to increase in 1999 by 3.9% and feel that WCOM "is 
the most aggressively and accurately positioned 
telecommunications services company." (-Reuters)  In other 
news, the old rumor of WCOM taking over Nextel Communications 
has resurfaced.  We will let you know if anything develops.  

BUY CALL APR-85 LDQ-DQ OI=6583 at $6.88 SL=5.25
BUY CALL APR-90*LDQ-DR OI=8129 at $3.50 SL=1.75
BUY CALL MAY-85 LDQ-EQ OI= 623 at $9.00 SL=6.75
BUY CALL MAY-90 LDQ-ER OI=1187 at $6.13 SL=4.25 

Picked on March 18th at $93.75      PE= N/A
Change since picked    -$ 3.87      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 04-29 est 0.34   versus 0.10
Average Daily Volume = 11.8 mln
Chart = http://quote.yahoo.com/q?s=WCOM&d=3m


TLAB - Tellabs Inc. $97.19 (+5.06)(+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.  

Though TLAB started the week with two down days, it finished
with a bang with three consecutive up days.  TLAB reached an
intra-day high of $99.75 on Friday, before settling for a 
$1.63 gain.  We have broken above previous highs and now 
need to break the mental barrier of $100.  Market permitting, 
we see TLAB breaking above $100 early this week.  If we do 
see a little profit taking, a bounce off the $95.50 mark is 

TLAB has its annual shareholder meeting on April 22.  This
seems to be an ideal time to announce a stock split.  If not
then, most likely with its earnings announcement on the 26th.
The 26th is still an estimated date.  In a couple of weeks we 
can find out the exact date.

BUY CALL APR- 95*TEQ-DS OI=1255 at $6.13 SL=4.25
BUY CALL APR-100 TEQ-DT OI=1010 at $3.88 SL=2.00
BUY CALL MAY-100 TEQ-ET OI= 158 at $7.00 SL=5.00
BUY CALL JUN-100 TEQ-FT OI=6091 at $9.00 SL=6.75

Picked on Mar.13th at   $90.69   PE = 38
Change since picked      +6.50   52-week low =$31.38
Analysts Ratings   13-15-1-0-0   52-week high=$99.75
Last Earnings   01/99  est .59   actual .62
Next Earnings   04-26  est .49   versus .37
Average daily volume = 2.69 mln
Chart = http://quote.yahoo.com/q?s=TLAB&d=3m

BVSN - BroadVision, Inc. $59.75 (-6.25)(+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 had a rough time, though it did come off its lows of
the week.  BVSN traded in a range from $54.88 to $72.38.  
We are about $5.00 higher than the lows.  It seems BVSN
has found a short-term base at about $57.50.  A bounce off
this level should be buyable.  We need to make sure that
BVSN has decided to continue up before jumping in.  

BVSN announced they are giving $10 million to their BE4
Network Fund.  This fund provides start-up capital for new
Internet based companies.  BVSN will also give preferred
pricing to these new companies.

BUY CALL APR-60*QVB-DL OI=663 at $5.63 SL=3.75 
BUY CALL APR-65 QVB-DM OI=648 at $3.75 SL=2.00 
BUY CALL MAY-65 QVB-EM OI= 15 at $6.25 SL=4.50
BUY CALL JUN-65 QVB-FM OI= 61 at $7.75 SL=6.00

Picked on Mar.20 at    $66.00   PE = 148
Change since picked     -6.25   52 week low =$ 9.25
Analysts Ratings   8-10-1-0-0   52 week high=$72.38
Last earnings  01/99  est .08   actual  .08
Next earnings  04-27  est .08   versus -.02
Average Daily Volume = 693.7 K
Chart = http://quote.yahoo.com/q?s=BVSN&d=3m


INSS - International Network Services $64.56 (-2.19)(+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 has had a really red week.  Except for Monday's saving 
grace, the company has fallen for four consecutive days.  It 
is now resting at its 15 day moving average.  Hopefully, you 
are still waiting with us for the turn around.  Even though it 
splits 3:2 this Friday April 5th, we don't suggest opening any 
new positions until there is a positive finish for the company.  
Never try to pick the bottom!  You will only get burnt.  Wait 
for the green signal and then ride the split.  The entry 
point will come.  It will be short, but hopefully sweet.  

No new news.

BUY CALL APR-60 XQS-DL OI=105 at $ 7.25 SL=5.75
BUY CALL APR-65*XQS-DM OI=325 at $ 4.50 SL=2.75
BUY CALL JUN-65 XQS-FM OI= 60 at $ 7.50 SL=5.75
Picked on March 21st at $66.75      PE= 137
Change since picked    -$ 2.19      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 = 269.0 K
Chart = http://quote.yahoo.com/q?s=INSS&d=3m


MSFT - Microsoft $178.13 (+6.94)(+11.00)(+5.25)(P5W -20.06)

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. 

After the close on Friday, MSFT split its shares 2:1.  But 
the big news and the play for MSFT stems from their 
announcement of negotiations of a settlement with the DOJ 
beginning on Tuesday.  Normally, we drop a company, or even 
recommend a put play anticipating a drop after a split.  
With MSFT though, its very possible the price will be bid 
up quickly in anticipation of a fast settlement.  It is 
also possible that the deal can go haywire at any time 
before or after negotiations start.  This play is for 
gunslingers only.  We need itchy trigger fingers to get in 
or out quickly on a leak or announcement of any news, good 
or bad.  At the very least, use stops orders to get you out 
if the trade moves against you.  

All prices listed above and below will be halved first 
thing Monday morning thanks to the 2:1 split MSFT underwent 
after Friday's close.  New option symbols will be generated 
then too.  Be sure to check the new symbols so you don't 
accidentally buy something stratospherically out of the 

one more time:
WARNING!  Options symbols will change MONDAY to handle
the 2:1 split.  Double check with your normal source.

BUY CALL APR-175*MSQ-DO OI=11052 at $ 9.88 SL= 7.50 
BUY CALL APR-180 MSQ-DG OI=13808 at $ 7.50 SL= 5.75
BUY CALL JUL-185 MSQ-GK OI= 1414 at $15.25 SL=11.75

Average daily volume = 16.4 mln.

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

PC Hardware

EMC - EMC Corporation $122.88 (+4.63)(+6.00)(P4W +9.88)

EMC is a Fortune 500 company that designs, manufactures, 
markets and 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.  They have 35% market 
share in the storage business.

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.  Technically, the MACD, stoch. and momentum are 
all positive.  Volume was average last week and a bit light 
on Friday.  The price has tended to bounce off its 13 dma 
and may need a couple of days to consolidate.  Resistance 
is $125.50 set last week.  We need more trading volume to 
get through it.  Market willing, target shooting may 
produce better results.  Confirm market direction before 

Lehman Bros. began coverage on Friday with an outperform 
rating citing, "The company has become a category leader 
and continues to demonstrate an ability to deliver 
outstanding results and we believe the shares represent an 
attractive long-term value."  Amen.  They are looking for 
revenue of $10 bln. by 2001, 1999 EPS of $2.00 and 2000 EPS 
of $2.60.  Also of note, EMC agreed to buy $3 bln. of disk 
drive technology from IBM over the next 5 years.  They also 
get access to IBM's treasure trove of other storage 

BUY CALL APR-120*EMB-DD OI=3110 at $ 6.88 SL= 5.00
BUY CALL APR-125 EMB-DE OI=1322 at $ 4.38 SL= 2.50
BUY CALL MAY-125 EMB-EE OI= 149 at $ 8.50 SL= 6.25
BUY CALL JUL-125 EMB GE OI=3586 at $11.00 SL= 8.75

Picked on Feb 14th at $118.25    PE = 83
Change since picked     +9.87    52 week low =$ 35.81
Analysts Ratings   10-5-0-0-0    52 week high=$125.50
Last earnings  12-98  est .46    actual .48
Next earnings  04-22  est .39    versus .28
Average Daily Volume = 4.0 mln
Chart = http://quote.yahoo.com/q?s=EMC&d=3m




The Option Investor Newsletter             3-28-99
Sunday                4  of  6

PC Hardware-continued

SUNW - Sun Microsystems, Inc. $116.50 (+6.12)

With world headquarters in Palo Alto, California, Sun 
Microsystems, Inc. has been described as "the last standing, 
fully integrated computing company adding its own value at 
the chip, OS and systems level." (John Doerr, Kleiner Perkins, 
quoted in Fortune, October 13, 1997).  In an industry 
characterized by red ink and fierce competition, Sun has 
averaged double digit growth over the last several years and 
has one of the strongest balance sheets in the industry, with 
nearly $1 billion cash in the bank. Sun is the leading provider 
of network computing systems including workstations, servers, 
and thin clients. 

We are adding SUNW as a stock split play.  SUNW splits 2-1
on April 8th.  SUNW reached a new 52-week high on Friday
as it reached an intra-day high of $121.25.  It closed $5
off this level.  We like the fact that SUNW has been strong
and the split is just two weeks away.  Watch for your
entry point to purchase new calls.

SUNW is in a strategic alliance with AOL and will broadcast
a meeting with AOL on March 30th to announce alliance issues
and strategy.  This also could give SUNW a bump.  

BUY CALL APR-115*SUQ-DC OI=3824 at $ 7.25 SL=5.50
BUY CALL APR-120 SUQ-DD OI=4584 at $ 5.00 SL=3.50
BUY CALL MAY-120 SUQ-ED OI= 386 at $ 8.88 SL=6.75

Picked on Mar.30th at $116.50   PE = 42
Change since picked     +0.00   52 week low =$ 38.19
Analysts Ratings   10-8-4-0-0   52 week high=$121.25
Last Earnings  01/99  est .66   actual .67 
Next Earnings  04-21  est .70   versus .59
Average daily volume = 7.70 mln.
Chart = http://quote.yahoo.com/q?s=SUNW&d=3m


AHP - American Home Products Corp. $66.69 (+0.89)(+0.43)(+5.88)

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.

AHP is recovering nicely since being hit with a -$3.31 loss 
back on Tuesday when the market dove over 200 points in one 
day.  AHP has since posted gains for three consecutive days.  
It is steadily approaching its all time high of $68.19 set 
back on 3/16.   Look for AHP to continue climbing if the 
markets stabilize.  However, there are a lot of unknowns out 
there.  The war and the Fed meeting Tuesday could persuade 
investors to pull out of the markets.  Make sure to use 
trailing stop losses.  

No new news.

BUY CALL APR-65*AHP-DM OI=3167 at $3.38 SL=1.75
BUY CALL APR-70 AHP-DN OI= 767 at $1.00 SL=0.00
BUY CALL MAY-65 AHP-EM OI=  53 at $4.63 SL=2.75
BUY CALL MAY-70 AHP-EN OI=1546 at $2.19 SL=1.00

Picked on March 14th at $65.38      PE= 36
Change since picked    +$ 1.31      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 04-20 est 0.50   versus 0.49
Average Daily Volume = 2.58 mln
Chart = http://quote.yahoo.com/q?s=AHP&d=3m

OMC - Omnicom Group Inc. $77.50 (+3.57)(+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.

If you want to see some momentum, take a peek at OMC's chart.  
The company has a beautiful graph that just keeps on getting 
better.  On Friday March 26th, the ad agency set yet another 
all time high of $79.25.  OMC constantly works to expand into 
new regions and continues to win new customers each week.  
Look for OMC to continue its present upward course.  

News:  Remember that back on March 18th, Morgan Stanley dean 
Witter had set a 12 month price target for OMC at $82.  OMC is 
already extremely close to this point which could possibly 
provide some resistance for the company.  Make sure to set 
your stop losses. 

BUY CALL APR-75*OMC-DO OI=304 at $4.75 SL=3.25
BUY CALL APR-80 OMC-DP OI= 45 at $2.13 SL=1.00
BUY CALL JUL-75 OMC-GO OI=130 at $9.38 SL=7.25 
Picked on March 21st at $73.94    PE= 46
Change since picked    +$ 3.56    52 week low =$37.00
Analysts Ratings     3-3-0-0-0    52 week high=$79.25
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 = 590.8 K
Chart = http://quote.yahoo.com/q?s=OMC&d=3m


WHR - Whirlpool Corp. $53.06 (+4.07)(+2.63)

Whirlpool is an appliance manufacturer and marketer of 
commercial and home appliances with facilities in North, 
South and Central America, Asia, Africa, the Middle East, 
and Europe. 

Even a sailor would steer their ship into this Whirlpool!  
This appliance maker will suck you in and lead you to riches.  
If you had bought into this company at the beginning of March,
you would already be squinting at the +$14 increase in stock 
price.  With so much momentum behind it, we see Whirlpool's 
present course continuing.  However, the company could have 
some price resistance at the $56 level so make sure to set 
your stop losses as we draw closer.  

No new news for WHR, but with a positive earnings warning
from Maytag (MYG), investors are going to be expecting the
same from WHR.

BUY CALL APR-50*WHR-DJ OI=123 at $4.25 SL=2.75
BUY CALL APR-55 WHR-DK OI= 13 at $1.38 SL=0.00
BUY CALL MAY-50 WHR-EJ OI= 35 at $5.25 SL=3.75
BUY CALL MAY-55 WHR-EK OI= 35 at $2.69 SL=1.25 

Picked on March 25th at $51.38      PE = 13
Change since picked    +$ 1.68      52 week low =$40.94
Analysts Ratings     2-2-4-0-0      52 week high=$75.25
Last earnings 01/99 est 0.85   actual 1.09 surprise=+28% 
Next earnings 04-20 est 0.79   versus 0.90
Average Daily Volume = 383.7 K
Chart = http://quote.yahoo.com/q?s=WHR&d=3m

G - Gillette $63.56 (+1.56)(+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.

Over the years, Gillette has been an outstanding company, 
but its performance last year was disappointing. G appears 
to have turned the corner now and its stock price is reflecting 
a return in investor confidence. G has a strong commitment to 
developing new products and excellent potential to further 
expand global sales. 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" and on 3/12, 
JP Morgan upgraded G from "LT Buy" to an outright "Buy". The 
$62.63 high it set back in early July provided resistance 
until last week, when the stock finally broke out to new highs. 
Gillette pulled back from the closing high it set on Thursday, 
but still closed comfortably above previous resistance. It now 
needs to clear the $64.38 intra-day high it set on 3-23. 
Worldwide battery demand is rising and a Mach 3 razor ad 
campaign is contributing to that product's success. Investors 
know that G is now poised to reap the benefits of large R&D 
investments and they are sending the stock higher. G won't 
make the dramatic moves of an Internet stock, but look how 
affordable the options are. 

BUY CALL APR-60*G-DL OI=2168 at $4.38 SL=2.75
BUY CALL APR-65 G-DM OI=2280 at $1.38 SL= .50
BUY CALL JUN-65 G-FM OI=3934 at $3.63 SL=2.00
BUY CALL JUN-70 G-FN OI= 431 at $1.69 SL= .75

Picked on March 14 at $62.00       PE = 67
Change since picked  +$ 1.56       52 week low =$35.31  
Analysts' ratings  6-7-4-0-0       52 week high=$64.38
Last earnings 12/98 est 0.39   actual 0.39 surprise=0%
Next earnings 04-16 est 0.25   versus 0.23
Average daily volume = 2.98 mln
Chart = http://quote.yahoo.com/q?s=G=3m

WMT - Wal-Mart $91.56 (-3.19)(-1.63)(+3.13)(+9.25P5W)

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.

In last Sunday's letter, we thought WMT might have reached an 
entry point. But we cautioned you to "please confirm upward 
movement before jumping in!" If you did that, you did not enter 
any new positions until Thursday, following WMT's bounce off 
its 30 dma. With the split date approaching, this coming week 
is a good time to scale into options. WMT splits on April 19. 
BUY CALL APR-90 WMT-DR OI=4102 at $4.63 SL=3.00
BUY CALL APR-95*WMT-DS OI=5932 at $2.13 SL=1.00
BUY CALL MAY-95 WMT-ES OI= 439 at $4.50 SL=2.75
BUY CALL JUN-95 WMT-FS OI=2553 at $6.00 SL=4.25

Picked on Jan 26th at $83.56       PE = 46  
Change since picked  +$ 8.00       52 week low =$48.19
Analysts' ratings 7-11-4-0-0       52 week high=$98.38
Last earnings 12/98 est 0.66   actual 0.70  
Next earnings 05-12 est 0.43   versus 0.37
Average daily volume = 3.23 mln
Chart = http://quote.yahoo.com/q?s=WMT&d=3m

GE - General Electric $107.81 (-4.19)(+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.

Beginning in January, GE tried 3 times to break through 
resistance at $105.00, its previous high. 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 was a very bullish sign for the stock, and 
investors moved in to send the price as high as $112.94 on 3-19.

GE is a Dow reactive stock, and it suffered in last week's 
market. A well-managed and broadly diversified company, GE has 
its hands in a number of businesses that are in strong sectors, 
including finance, the Internet, entertainment, and medical 
systems. If the Dow can rally on good volume, GE will light up.

BUY CALL APR-105*GE-DA OI=3369 at $5.00 SL=3.25
BUY CALL APR-110 GE-DB OI=7178 at $2.13 SL=1.00
BUY CALL MAY-110 GE-EB OI=1824 at $4.88 SL=3.00 
BUY CALL JUN-110 GE-FB OI=5016 at $6.19 SL=4.50

Picked on March 9 at $106.00       PE = 38
Change since picked +$  1.81       52 week low =$ 69.00
Analysts' ratings  8-8-2-0-0       52 week high=$112.94
Last earnings 12/98 est 0.80   actual 0.80 surprise=+0%
Next earnings 04-08 est 0.65   versus 0.57 
Average daily volume = 4.56 mln
Chart = http://quote.yahoo.com/q?s=GE=3m

LOW - Lowe's Companies, Inc. $63.81 (+0.07)(-1.13)(+2.88)(P4W+4.94)

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.

Even though LOW is only up +$0.07 for the week, the company has 
actually made quite a turn around.  On Monday and Tuesday, LOW 
sunk with over a four dollar drop.  However, it consistently 
climbed up from the trenches and has re-established 
its ascent.  It's all time high and resistance level is not far 
off at $66.44.  As we state time and time again, make sure to 
protect your profits with stop losses.   
News: Eagle Hardware & Garden Inc. will be acquired by LOW in 
a merger expected to close on Friday April 2nd.  

BUY CALL APR-60*LOW-DL OI=1396 at $4.88 SL=3.25
BUY CALL APR-65 LOW-DM OI= 985 at $1.94 SL=1.00
BUY CALL MAY-65 LOW-EM OI=  24 at $3.63 SL=1.75
BUY CALL JUL-65 LOW-GM OI= 377 at $5.50 SL=3.75

Picked on Jan 31st at $58.31   PE=47
Change since picked    +5.50   52 week low =$23.88
Analysts Ratings  7-11-4-0-0   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

ALD - Allied Signal, Inc $50.38 (+4.44)

AlliedSignal, a global conglomerate, is an advanced 
technology and manufacturing company with operations in 40 
countries.  It serves customers in a wide variety of 
business segments.  ALD provides aerospace technology like 
weather-radar systems and automotive products such as Fram 
filters and Prestone anti-freeze. They also develop and 
manufacture chemicals, fibers, plastics, and advanced 
materials.  For example, our law enforcement benefit from 
Spectra, a polymer used in body armor.

ALD made its claim this week making steady and consistent 
gains.  The stock went against the market on Friday and 
ended with a bang! ALD did two things: it closed on its 
intraday high of $50.38 and at the same time set a new 52 
week record!  After this bold move, it's uncharted territory 
for this stock.  Its chart shows a nice upward trend, 
especially the past three days, and ALD is positioned 4 
solid points above its 10 dma.  

AlliedSignal recently formed two major alliances: One with 
DCH Technologies in the areas of gas sensors and hydrogen 
energy and the other with Delphi Automotive to develop 
anti-lock brake systems for the heavy-duty truck market. 
Both announcements came on Friday spiking up the stock 
+2.38 points. The good technicals and positive press suggest 
ALD can climb higher.  As Always, confirm direction and put 
stops in place to protect profits. 

BUY CALL APR-45.00 ALD-DI OI= 457 at $5.88 SL=4.00
BUY CALL APR-47.50*ALD-DW OI= 300 at $3.63 SL=1.75
BUY CALL APR-50.00 ALD-DJ OI=   0 at $1.94 SL=1.00 Vol=135
BUY CALL MAY-47.50 ALD-EW OI=  48 at $4.63 SL=3.00
BUY CALL JUN-50.00 ALD-FJ OI=1045 at $3.75 SL=2.00

Picked on March 28th at  $50.38   PE = 20
Change since picked       +0.00   52 week low =$32.62
Analysts Ratings      8-4-1-0-0   52 week high=$50.38
Last earnings  12/98   est 0.62   actual 0.62
Next earnings  04-22   est 0.59   versus 0.52
Average daily volume = 1.45 mln
Chart = http://quote.com/q?s=ALD&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 

LLY - Eli Lilly & Co $84.44 (-3.00)

This company wants you to take it easy in life.  They are 
the makers of the best-selling anti-depressant drug, Prozac.  
Eli Lilly discovers, develops, manufactures, and sells 
Life Science products.  They also provide healthcare 
management services.

Merrill Lynch had depressing news for Lilly on 
Friday.  It cut its revenue expectations for the company on 
concerns rival drug, Celexa (made by FRX and WLA), will take 
at least 19% of the market share away from Prozac over the 
next three years. Merrill Lynch's investigation went as far 
as hiring a research firm to make medical inquiries and it 
concluded Celexa has fewer side effects than the much 
proclaimed Prozac. Prozac is a major part of LLY's revenues.
This news was threatening and LLY dropped -2.06 giving back 
the small gains it managed to acquire on Wednesday and 
Thursday.  The stock offered a nice 5 point trading spread 
during the week and closed down -3.00 overall.  

Conservative players should wait for LLY to move through
$84, since that is support.

BUY PUT APR-80 LLY-PP OI=1763 at $1.13 SL=0.50
BUY PUT APR-85*LLY-PQ OI=2937 at $3.13 SL=1.50

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


GIS - General Mills $74.31 (+.31)(-4.56)

General Mills may not be the cereal killer, but it is #2 in 
the US (behind Kellogg).  General Mills makes one of the US's 
most popular cereal brands (Cheerios) and is a leader in 
flour (Gold Medal), baking mixes (Betty Crocker, Bisquick), 
dinner mixes (Hamburger Helper), and fruit snacks (Fruit 
Roll-Ups).  The company is #2 in refrigerated yogurt (Yoplait, 
behind Dannon) and has Ralcorp's Chex cereal and snack lines. 
It also sells Betty Crocker cookbooks, licenses Betty Crocker 
housewares, and runs a food service division.  While still on 
the front line of the US cereal war, General Mills also has 
developed international operations including joint ventures 
with Nestle, PepsiCo, and Bestfoods. (-Hoovers)

GIS started the week out with three straight gains.  The
4th day saw an even day and then Friday saw GIS take a nice
dive.  Though GIS was slightly positive for the week, Friday
showed the weakness that is inherent in GIS.  GIS, again, 
could not close above its descending 10-dma.  The $74 level
was where GIS reversed before, so wait to see it move through
this level before initiating new put plays.

BUY PUT APR-75*GIS-PO OI=105 at $2.00 SL=1.00 ITM $0.87
BUY PUT APR-70 GIS-PN OI= 56 at $0.50 SL=0.00

Average Daily Volume = 464.5k

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


CMB - Chase Manhattan Corp. $80.50 (-2.00)

The Chase Manhattan Corporation is a bank holding company 
providing diversified financial services.  Chase provides 
domestic and international corporate finance, wholesale 
banking and investment services. Financial services include 
personal and commercial checking accounts, savings and time 
accounts, personal and business loans, brokerage and insurance. 
The corporation serves a wide range of customers including 
commercial, professional and middle market customers. 
(from Stock SmartPro) 

CMB had a negative week, but is holding above its 50-dma at
$79.  We would like to see CMB fall below this key level.
We would like to see CMB announce a desire to purchase a
broker and have the market feel it isn't a good deal.  
Enough of wishing.  CMB could hit $82 and then bounce
downwards.  Make sure of direction before jumping in.

BUY PUT APR-85 CMB-PQ OI= 605 at $6.13 SL=4.25 ITM $4.50
BUY PUT APR-80*CMB-PP OI=1790 at $3.00 SL=1.50

Average Daily Volume = 4.08 mln

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


LHSG - LHS Group $35.88 (-1.83)(+0.50)(-3.56)(P5W -6.19)

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.

Though down for the week, $35 is providing some support.  
Investors appear comfortable with the current price.  
Midweek, we even saw +$1.25.  The good news is that 
technically, we now have a better entry point while waiting 
for the wheels to fall off the jalopy.  The chart is still 
descending with MACD barely positive, while stochastics
and momentum remain negative.  The only news came in 
announcements that Prudential and Volpe Brown began 
coverage with underwhelming ratings of "hold" and 
"neutral".  There are 2 ways to play: confirm negative 
market direction, while considering last weeks uptick a 
buying opportunity; or wait for a break below $35.  
Remember to use stops in case there is some good news.

BUY PUT APR-40*QLH-PH OI=1608 at $4.88 SL=3.00 premium=$.76
BUY PUT APR-35 QLH-PG OI= 109 at $2.00 SL=1.00

Average daily volume = 154 K

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


EMR - Emerson Electric $54.38 (-2.12)(-3.38)(P3W +2.38)

Emerson Electric Co. designs, engineers, manufactures and 
sells a diverse range electrical, and electronic products 
on contract for others and for its own label on a worldwide 

As we wrote Thursday night when we started the play, 
technically Emerson's chart has fallen off a cliff and 
violated support it set in 8/1998 and 1/1999 at $55.  Their 
last earnings were on 2-2 where they fell $0.05 short of 
their $0.69 estimate (-7% surprise).  Volume has increased 
over the previous week as the price has held closely to 
$54.  EMR was up $1 intraday on Friday, but gave most of it 
back in the last hour of trading.  EMR just can't hold a 
big gain.  In the overall down trend, EMR's 3 stable days 
have set up a better market entry before it resumes its 
march to the cellar.  Technical indicators are decidedly 
negative.  This is a fundamental, technical, and just for 
fun, a "cockroach" play.  Where you find 1 cockroach, 
you'll find many more (thanks Roger).  We expect the bugs 
to come out, especially with earnings on May 4.  Confirm 
market direction before playing.

CAUTION: These are thinly traded

BUY PUT APR-60 EMR-PL OI=35 at $5.88 SL=4.00
BUY PUT APR-55*EMR-PK OI=89 at $2.38 SL=1.25

Average Daily Volume  = 1.0 mln.

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


ELN - Elan Corps Ads $66.56 (-8.88)

Elan is a worldwide company that develops drugs and delivery
systems that control their absorption. Elan strives to 
improve drug utilization by the human body.  It has R&D and 
manufacturing facilities in Bermuda, Ireland, Israel, and 
the US.  

It's been downhill since March 9th - the day after ELN hit 
$87.87 and established its new 52 week high. The news behind 
that week's surge was the 2:1 split announcement expected to 
be approved at the shareholders' meeting on April 30th. The 
stock just couldn't hold its newly found gains and began 
its descent. ELN found resistance around $82-83 but slowly 
penetrated this line of opposition to continue its downward 
trend. On Monday, Vector Securities downgraded ELN from "buy" 
to simply "attractive".  Analyst, Patricia Bank, believes 
the stock price is too high and cited concerns over Elan's 
new drugs.  Thursday, during the Dow's hoopla, solid evidence 
presented itself when the stock crossed over its 200 dma at 
$69. More bearish confirmation came on Friday as ELN dipped 
another -2.56. We'd love to see ELN go right on by $54.56, 
its 52 week low!

BUY PUT APR-60 ELN-PL OI=2666 at $1.94 SL=1.00
BUY PUT APR-65*ELN-PM OI= 732 at $3.75 SL=2.00
BUY PUT APR-70 ELN-PN OI=2006 at $5.88 SL=4.00

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


WPI - Watson Phrmctls. $39.63 (+1.13)(-4.25)(P3W -7.19)

WPI designs, manufactures and markets both branded and 
generic drugs.  In the generic category, WPI makes 
cardiovascular drugs resembling Lopressor and Inderal, 
analgesics resembling Vicodin and Lortab, and asthma drugs 
resembling Proventil and Ventolin.  Branded drugs include 
Dilacor XR and Microzide, both antihypertensives.  However 
their main branded focus is on acne, women's contraceptives 
and hormone regulators, plus epilepsy drugs.  Its branded 
business comes primarily through acquisition in which they 
hope to do more.

On Friday, DLJ initiated coverage with a "market perform". 
Bear Stearns probably doesn't want to be reminded that they 
upped their price target from $50 to $60 on March 9.  The 
price has been slipping since mid-February, as investors 
seemed unimpressed that the company barely made their 
numbers.   WPI has recently received approval from the FDA 
to manufacture and sell 2 different strengths of Nicorette 
gum's generic equivalent, which may help explain the price 
spike on Thursday.  It didn't hold Friday, but did give us 
a great entry point for a put.  Technically, WPI's chart is 
spiraling earthward with support nowhere in site.  Not 
pretty.  Volume has been heavy too during the sell-off.  
Earnings are on 4-22.  If there were to be a surprise, 
management would have let the street know already in hopes 
of stopping the slide.  Don't count on it.  Of course, 
confirm market direction before playing.

BUY PUT APR-45 WPI-PI OI= 759 at $6.38 SL=4.50
BUY PUT APR-40*WPI-PH OI=1515 at $3.13 SL=1.50
BUY PUT APR-35 WPI-PG OI= 321 at $1.00 SL=0.00

Average Daily Volume = 742 K

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


The Option Investor Newsletter            3-28-99
Sunday                5  of  6

A Key Moment?

Friday, March 26

U.S. stocks fell Friday as uncertainty about corporate earnings,
interest rates and turmoil in Kosovo made investors skeptical.
The Dow slid 14 points to 9822 after rebounding 170 points on
Thursday. The Nasdaq index of technology stocks lost 15 points to
2419. In the broader market, declining issues beat advancers 16
to 13 on active volume of 694 million shares on the NYSE.

Thursday's new positions: (positions/prices):

CTXS APR47C/APR45C  $0.38  Credit (post-split depression?)
RMBS APR85C/APR80C  $0.38  Credit (down from the open)
CPB  MAY42C/APR42C  $0.87  Debit  (priced near 10:00 am)
EMC  OCT130C/A125C  $12.00 Debit  (easy entry at the open)
PG   LJAN100/A100C  $9.25  Debit  ($0.50 above our target)

Portfolio plays:

Th UK butterfly spread has eroded successfully to the point where
the position could be closed early for a small profit. The stock
is showing some strength and stability in the volatile market and
it may be safer to take the current return rather than chance a
break-out above the higher strike price. The LSI straddle is also
performing better as the stock price starts to rebound from the
bottom of its trading range. We will plan to exit the call option
(APR30C) at $1.50. NSOL and CTXS should keep things exciting with
their recent volatility. Be sure to have an exit strategy or a
roll-out price planned for both of those positions.

Good Luck!
				- NEW PLAYS -
UNPH - Uniphase Corp.  $106.93     *** Technology in demand ***

Uniphase makes fiber-optic telecommunications equipment, laser
subsystems, and laser-based semiconductor wafer inspection and
analysis equipment. The optoelectronics company's chips are used
in communications to increase the carrying capacity of optical
fibers. Uniphase supplies its laser subsystems to equipment
manufacturers in various markets, including bar code scanning,
biotechnology, and printing. The company also makes equipment
used to identify microscopic defects in semiconductor wafers.
This spring, UNPH will complete its merger with Ontario-based
JDS Fitel.

The leading fiber-optic networks are looking for ways to gain
more bandwidth. Companies such as Ciena, Alcatel and Lucent are
working on a number of products to get more light waves into
the optical fiber. The result is a backlog of orders for the
components built by Uniphase and its merger partner JDS Fitel.
Their products include some of the most important technology in
the communications industry. Analysts predict that sales of
optical components will jump from $1.8 billion in 1998 to $3.5
billion by 2000.
Component suppliers have seen their shares climb by as much as
1,000% in the past three years. Uniphase share value has gained
200% since October and increased by 10 times since 1995. (Its
merger partner, JDS Fitel, has quadrupled since October.) The
stocks' popularity seems unlikely to ease before the demand for
components does and Uniphase is expected to grow profits 40% in
coming years.

PLAY (conservative/credit spread):

BUY  PUT APR-90 UQD-PR OI=350 A=$1.38
SELL PUT APR-95 UQD-PS OI=93  B=$2.19

Chart = http://quote.yahoo.com/q?s=UNPH&d=3m
PBI - Pitney Bowes  $61.25     *** Terrible Technicals ***

Pitney Bowes is the world's largest producer of postage meters
with 86% of the US market. It also makes other mailing equipment,
copiers, and fax machines and provides shipping/weighing systems.
The company has a management services division that provides
facilities and records management and document services, and a
leasing service that finances other companies' purchases of new
office equipment. Pitney Bowes is focusing on the untapped small
and home office markets for its sales and is strengthening its
global customer base, specifically in the UK and China.

For years, many small-business owners have used an expensive
Pitney Bowes meter to process outgoing mail. Now there are new
Internet companies working with the Postal Service to develop a
PC-based postage service that will allow businesses to print
their own stamps from a computer.

Pitney Bowes is working on its own version of this service
called ClickStamp PC but most analysts agree they are several
months behind the leading company in this field, Stamps.com. The
money at stake is substantial but not enormous. Some estimate
that PC Postage will account for about 4% of the U.S.P.S's total
sales in 2003, generating about $138.7 million in fees for the
companies playing in the market. Those predictions don't include
potential international usage. Stamps.com has some high-powered
partners. The company recently received $30 million in a round
of financing, which included Intel and Galileo as investors.
Stamps.com also recently announced that it will begin exploring
how to use its technology to create vouchers or certificates in
other industries. Another competitor, E-Stamp's, has solid
relationships with Microsoft and Compaq that can also become a
big advantage if these companies decide to build the E-Stamp
product into Office or Excel.

PLAY (conservative/credit spread):

BUY  CALL APR-70 PBI-DN OI=165 A=$0.25
SELL CALL APR-65 PBI-DM OI=868 B=$0.87

Chart = http://quote.yahoo.com/q?s=PBI&d=3m
RX - IMS Health  $32.75     *** Going Down? ***

IMS Health is a spinoff of information services firm Cognizant.
It is a leading worldwide provider of information and decision
support services to the pharmaceutical/health care industry. Its
Erisco subsidiary develops administrative & analytical software
for the managed care industry. IMS provides venture capital to
emerging health care companies through Enterprise Associates. It
also develops software through Cognizant Technology Solutions.
Its SSJ K.K. unit sells financial software in Japan. IMS also
owns about half of high-tech research/consulting firm Gartner
Group and plans to distribute its Gartner interest to the IMS

IMS Health recently announced it expects 1999 earnings to hit
$0.79 to $0.81 per share on a pro-forma basis, excluding the
impact of technology market research firm Gartner Group Inc.
(Last November, IMS announced a plan to recapitalize and spin
off its equity stake in Gartner Group Inc.) IMS officials also
told analysts that EPS should jump 20% and revenue should swell
15% for 1999.

All these wonderful forecasts and the stock price still points
downward. The technicals certainly don't reflect the bullish
outlook of the company officials.

PLAY (conservative/debit spread):

Note : Do not open this position for more than $4.00 debit. If
the prices are not fairly close to the target after the market
opens then consider moving to the MAY position.

BUY  PUT APR-40 RX-PH OI=50  A=$7.75
SELL PUT APR-35 RX-PG OI=725 B=$3.25
INITIAL NET DEBIT TARGET=$4.00 ROI(max)21% B/E=$36.00

PLAY (conservative/debit spread):

BUY  PUT MAY-37.50 RX-QU OI=0 A=$6.00
SELL PUT MAY-35.00 RX-QG OI=6 B=$4.25
INITIAL NET TARGET=$1.50 ROI(max)=66% B/E=36.00

Chart = http://quote.yahoo.com/q?s=RX&d=3m
PROX - Proxim  $29.93     *** Earnings Speculation ***

Proxim is one of the leading makers of portable, wireless LAN
access components. Wireless LANs transmit and receive data over
the air via radio waves, and Proxim makes the radio-frequency
modules and wireless adapters that are used by manufacturers in
products such as handheld data-collection terminals, notebooks,
and pen-based notepads. Proxim sells its RangeLAN2 family of
products to OEMs such as Casio Computer, Digital, and Fujitsu.
The company markets branded products to value-added resellers
in health care, hospitality, education, financial services and
systems integrators. They also sell private-label modules that
are marketed by AMP, LXE, and Percon.

Proxim is regarded as the leader in the worldwide wireless local
area networking (LAN) industry. Frost & Sullivan recently said
in its 1999 market study that PROX has the leading market share
of worldwide wireless LAN unit shipments. PROX is also the only
major supplier in this market with an "Up Trend Rating" from the
market study.

The current volatility in call option prices probably stems from
the upcoming earnings announcement due in mid-April. Some say the
report will come just after the strike date and that should make
for an interesting earnings run!

PLAY (speculative/debit spread):

BUY  CALL APR-25 WQG-DE OI=35  A=$6.38
SELL CALL APR-30 WGQ-DF OI=710 B=$3.87
INITIAL NET DEBIT TARGET=$2.25 ROI(max)=120% B/E=27.25

Chart = http://quote.yahoo.com/q?s=PROX&d=3m
TXN - Texas Instruments  $96.31     *** Back for More! ***

Texas Instruments leads the digital signal processor (DSP) market
with a 45% share. DSPs convert signals such as sound and light
into digital signals. They are used in programmable products,
such as VCRs and camcorders, automobiles, computer peripherals and
in more than 85 million cellular phones. TI continues to pioneer
new technologies: Its digital light processor technology uses tiny
mirrors to create an ultrasharp display for TVs and home computers.
To focus on its DSP business, TI has sold its defense electronics
and memory chip units.

TXN fell almost $10 last Tuesday on analyst comments that sales
of semiconductor components to disk drive makers were slowing.
One of the industry experts said that the disk drive component
market was softer than expected. The analyst said he still rated
the company as a BUY, adding that the stock was still his favorite
among large cap semiconductors. The sell-off was a bit extreme and
the stock price bounced right back into the middle of its trading
range at $97 (the 25 DMA). In the last month, three rallies have
failed near $105 and it appears there is some support around $85.
The extreme volatility has presented us with an excellent neutral

PLAY (aggressive/credit strangle):

SELL CALL APR-105 TXN-DB OI=1452 B=$1.00
SELL PUT  APR-80  TXN-PP OI=1851 B=$1.00

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

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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            3-28-99
Sunday                6  of  6

Closing Covered-Call Positions Early...

One of the most common situations the covered-call writer may
encounter is the one in which the underlying stock price rises
significantly after the initial position has been established.
There are generally several choices available if this happens.
The trader may decide to do nothing and just let his stock be
called away, accepting the return that he had hoped for when he
established the position. However, if the stock rises fairly
quickly or the written call comes to parity, the writer may
either close the position early or "roll" the call up.

Closing Early...

As the stock increases in price, the written call will lose its
time premium and may even begin to trade near parity. If this
occurs, the trader may decide to close the position in advance
of expiration by purchasing the sold call and selling the stock
outright for a slightly smaller profit than originally intended.
The advantage of closing a covered call early is that the trader
can gain the return in a shorter period of time, increasing his
annualized profit on the position. The decision to execute this
trade can be determined by simply calculating and comparing the
return on investment (profit vs. time) for both positions. One
other consideration should be to place the order to close the
position as a "net" order, just the opposite of the entry method
(buy-write) generally used to open this type of play.

Rolling Up...

The writer will be buying back the call that was originally sold
and selling a new call with a higher strike price to increase
his profit potential. When one rolls up, he must also increase
the debit of the position and the downside break-even point is
raised by the amount of the new debit required. The new position
is also subject to a potential loss if the stock should pull back.
Some traders will sell a more distant expiration when rolling up
to reduce the debit required or lower the break-even price.

Basically, rolling up increases one's profit potential but also
creates more risk from a stock price reversal. Most experts say
it is not advisable to roll up if at least a 10% correction in
the stock price cannot be withstood. Remember, the initial return
for the covered call was set when the position was established and
if this goal is being met, the trader should be very careful when
risking that profit. Good Luck!
SUMMARY OF PREVIOUS PICKS (3 weeks to the April strike date)
Stock  Price  Last    Mon  Strike  Opt    Profit   ROI   Monthly
Sym    Picked Price        Price   Bid    /Loss          ROI

UBS    11.88  11.69   Apr  12.50  1.25   $  1.06  10.0%  10.8%
ARTT    9.38  12.63   Apr   7.50  2.56  *$  0.68  10.0%  10.8%
FFD    10.88   9.75   Apr  10.00  2.00   $  0.87   9.8%  10.6%
DAOU    6.06   6.38   Apr   5.00  1.56  *$  0.50  11.1%   9.7%
MTIC    5.88   5.59   Apr   5.00  1.44  *$  0.56  12.6%   9.1%
MCHM    9.75   9.88   Apr   7.50  2.88  *$  0.63   9.2%   6.6%
AXTI   21.25  21.38   Apr  17.50  4.75  *$  1.00   6.1%   6.6%
CUST   11.75  14.94   Apr  10.00  2.31  *$  0.56   5.9%   6.4%
MMCN   14.56  15.00   Apr  12.50  2.75  *$  0.69   5.8%   6.3%
AMMB    9.88   8.66   Apr   7.50  2.88  *$  0.50   7.1%   6.2%
ESPI   10.88  10.69   Apr   7.50  3.75  *$  0.37   5.2%   5.6%
VYTL   25.50  27.75   Apr  22.50  4.00  *$  1.00   4.7%   5.1%
GALT   23.94  26.00   Apr  20.00  5.00  *$  1.06   5.6%   4.9%
FORE   13.13  18.69   Apr  10.00  3.63  *$  0.50   5.3%   4.9%
NWAC   25.69  26.56   Apr  25.00  2.00  *$  1.31   5.5%   4.8%
PWAV   28.94  25.88   Apr  25.00  5.13  *$  1.19   5.0%   4.3%
ENZN   16.56  14.50   Apr  15.00  2.38   $  0.32   2.3%   2.0%

** We will take credit for the successful forecast on ITVU last
   week but because of the "gap-up" at the open, our play was

-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).
                    *** LOSING PLAYS ***
Determining when to exit a play is a matter of personal preference
but we strongly recommended closing any play that falls more than
20% below the initial cost-basis. Some positions may eventually
become profitable but it is generally more productive to exit a
losing play and move your capital into another prospective trade.
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

COOL   20.63  Apr 17.50  QOO DW  4.25  156   16.38   6.84%   6.84%
FORE   18.75  Apr 15.00  FQO DC  4.38  5683  14.37   4.38%   4.38%
IDTC   17.25  Apr 15.00  IQJ DC  2.88  1798  14.37   4.38%   4.38%
KLOC   13.75  Apr 12.50  KCU DV  2.50  318   11.25  11.11%  11.11%
MMCN   15.19  Apr 15.00  CMQ DC  1.44  515   13.75   9.09%   9.09%
NDB    26.88  Apr 22.50  NDB DX  5.00  86    21.88   2.83%   2.83%
OMKT   14.00  Apr 12.50  OQM DV  2.00  1833  12.00   4.17%   4.17%
PPOD   11.00  Apr 10.00  QPP DB  1.50  839    9.50   5.26%   5.26%
PROX   30.00  Apr 30.00  WQG DF  3.88  710   26.12  14.85%  14.85%
KLOC   13.75  May 10.00  KCU EB  4.75  500    9.00  11.11%  11.11%
Sequenced by Return Called 
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

PROX   30.00  Apr 30.00  WQG DF  3.88  710   26.12  14.85%  14.85%
KLOC   13.75  Apr 12.50  KCU DV  2.50  318   11.25  11.11%  11.11%
MMCN   15.19  Apr 15.00  CMQ DC  1.44  515   13.75   9.09%   9.09%
COOL   20.63  Apr 17.50  QOO DW  4.25  156   16.38   6.84%   6.84%
PPOD   11.00  Apr 10.00  QPP DB  1.50  839    9.50   5.26%   5.26%
FORE   18.75  Apr 15.00  FQO DC  4.38  5683  14.37   4.38%   4.38%
IDTC   17.25  Apr 15.00  IQJ DC  2.88  1798  14.37   4.38%   4.38%
OMKT   14.00  Apr 12.50  OQM DV  2.00  1833  12.00   4.17%   4.17%
NDB    26.88  Apr 22.50  NDB DX  5.00  86    21.88   2.83%   2.83%
KLOC   13.75  May 10.00  KCU EB  4.75  500    9.00  11.11%  11.11%
Sequenced by Return Not Called
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

Company Descriptions
COOL - Cyberian Outpost  $20.63     *** 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 still favorable with support near $15. The company plans to
release the upcoming earnings report on 3/29 and broadcast the
conference call live on the Internet.

Apr 17.50 QOO-DW Bid=4.25 OI=156 CB=16.38 RC=6.84% RNC=6.84% 

Chart = http://quote.yahoo.com/q?s=COOL&d=3m
Fore - Fore Systems  $18.75     *** Takeover Target? ***

FORE Systems is the maker of computer networking products based
on high-speed asynchronous transfer mode (ATM) offers switches
and adapter cards, internetworking and network management software
and ATM video products. Its networking equipment helped create 
special effects in the movies Babe and Starship Troopers. The 
speculation is still driving this stock and the price recently
crossed above its 150 dma on extreme buying pressure.

Apr 15.00 FQO-DC Bid=4.38 OI=5683 CB=14.37 RC=4.38% RNC=4.38% 

Chart = http://quote.yahoo.com/q?s=FORE&d=3m
IDTC - IDT Corporation  $17.25  *** IPO speculation? ***

IDT Corporation is a telecommunications company which offers a 
broad range of integrated long-distance telephone and Internet 
access services. IDT Corp has been trending down (probably in 
anticipation of lackluster earnings) but rebounded sharply on
news that an agreement was signed with GeoCities to become a
member of its e-commerce affiliate program. Currently, there is
speculation about a possible IPO deal or merger and that seems
to be driving up this stock. Rumors suggest a possible "news"
release on Monday. Good support area at the $15 strike.

Apr 15.00 IQJ-DC Bid=2.88 OI=1798 CB=14.37 RC=4.38% RNC=4.38% 

Chart = http://quote.yahoo.com/q?s=IDTC&d=3m
KLOC - Kushner Locke Co.  $13.75  *** Technical Play ***

KLOC produces, develops and distributes television programming and
feature films for major television networks, pay cable services 
and other delivery systems. No recent news since a report that
KLOC may be bidding for the licensing firm "Harvey Entertainment".
This activity spurred Kushner Locke to a new high last week. The
chart is depicting stage II characteristics and we offer two entry

1. Short term play, higher return, less downside protection; or
2. Long term play, less return, but deeper ITM (more protection!)


Apr 12.50 KCU-DV Bid=2.50 OI=318 CB=11.25 RC=11.11% RNC=11.11% 


May 10.00 KCU-EB Bid=4.75 OI=500 CB=9.00  RC=11.11% RNC=11.11% 

Chart = http://quote.yahoo.com/q?s=KLOC&d=3m
MMCN - MMC Networks, Inc.  $15.19  *** Stage I ***

MMCN Inc, is a developer and supplier of high-performance, open-
architecture, software-programmable processors optimized for 
networking applications. MMC Networks shares started climbing in
February after increased earnings were reported along with several
upgrades. The chart is forming a nice base with support around our
cost basis. The potential for upside movement appears to be rising
as BOP is increasing & the price is moving back above its 150 dma.

Apr 15.00 CMQ-DC Bid=1.44 OI=515 CB=13.75 RC=9.09% RNC=9.09% 

Chart = http://quote.yahoo.com/q?s=MMCN&d=3m
NDB - National Discount Brokers  $26.88   *** 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. Excellent technical support at $20
and the stock closed at the high on Friday with good volume.

Apr 22.50 NDB-DX Bid=5.00 OI=86 CB=21.88 RC=2.83% RNC=2.83% 

Chart = http://quote.yahoo.com/q?s=NDB&d=3m
OMKT - Open Market, Inc. $14.00  *** New Trend? ***

OMKT develops, markets, licenses and supports enterprise-class,
packaged application software products and professional services
enabling its customers to engage in Internet commerce, info 
commerce and publishing. The share price of Open Market has been
"basing" for four months with new buyers entering every time it
nears $12, forming a strong support area. A few short term "buy"
signals have been exhibited and the increased volume may suggest
an attempt at a new high.

Apr 12.50 OQM-DV Bid=2.00 OI=1833 CB=12.00 RC=4.17% RNC=4.17% 

Chart = http://quote.yahoo.com/q?s=OMKT&d=3m
PPOD - Peapod, Inc. $11.00  *** Internet Groceries ***

Peapod is an interactive, online grocery shopping and delivery 
company and a provider of targeted media and research services.
Peapod continues to expand its alliances (Walgreen Co.) and 
online products (research service). The stock was upgraded on
Monday and Peapod's tape continues to display excellent stage II
qualities with good relative strength. This suggests the uptrend
will continue.

Apr 10.00 QPP-DB Bid=1.50 OI=839 CB=9.50 RC=5.26% RNC=5.26% 

Chart = http://quote.yahoo.com/q?s=PPOD&d=3m
PROX - Proxim  $30.00     *** LAN Leader! ***

Proxim is one of the leading makers of portable, wireless LAN
access components. Wireless LANs transmit and receive data over
the air via radio waves, and Proxim makes the radio-frequency
modules and wireless adapters that are used by manufacturers in
products such as handheld data-collection terminals, notebooks,
and pen-based notepads. Frost & Sullivan recently said that PROX
has the leading share of worldwide wireless LAN unit shipments.
The current volatility in call option prices probably stems from
the upcoming earnings announcement due in mid-April. Some say the
report will come just after the strike date and that should make
for an interesting earnings run!

Apr 30.00 WQG-DF Bid=3.88 OI=710 CB=26.12 RC=14.85% RNC=14.85% 

Chart = http://quote.yahoo.com/q?s=PROX&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
PROX   29.94 Apr  30.00  WQGDF   4.25 14.20  271   710
ZD     24.63 Apr  25.00   ZDDE   2.75 11.17  835  4667
SAVLY  12.50 Apr  12.50  QVYDV   1.38 11.00   63   182
WAVO    9.25 Apr  10.00  WKQDB   1.00 10.81  708  2542
ICGX   17.06 Apr  17.50  QIGDW   1.75 10.26    5   190
PETC    9.75 Apr  10.00  QPTDB   1.00 10.26   20    49
AFCI    7.38 Apr   7.50  AQFDU   0.75 10.17   10   332
REV    22.25 Apr  22.50  REVDX   2.25 10.11  233   432
CYTC   14.94 Apr  15.00  YQKDC   1.50 10.04   10   226
MMCN   15.00 Apr  15.00  CMQDC   1.50 10.00    9   515
EGLS   12.50 Apr  12.50  EIQDV   1.25 10.00   14    65
HLYW   20.00 Apr  20.00  HWQDD   2.00 10.00   30    67
SUGN   17.50 Apr  17.50  UGQDW   1.75 10.00   78   263
ZD     24.63 May  25.00   ZDEE   4.63 18.78   14   177
MCRE    6.56 May   7.50  MQZEU   1.13 17.14   68   350
UAG     9.69 May  10.00  UAGEB   1.63 16.77   35   249
PLAT    9.88 May  10.00  FLQEB   1.63 16.46  325    14
PTVL   17.50 May  17.50  QUTEW   2.88 16.43    3    55
WAVO    9.25 May  10.00  WKQEB   1.50 16.22  181  1402
IDTC   17.19 May  17.50  IQJEW   2.75 16.00   25    53
SAVLY  12.50 May  12.50  QVYEV   2.00 16.00    8   128
MCHM    9.88 May  10.00   QQEB   1.56 15.82    3    93
ERTH   11.50 May  12.50  QEREV   1.81 15.76  135    67
IMRS   14.56 May  15.00  QIQEC   2.25 15.45    3   349
SFAM   12.25 May  12.50  FQFEV   1.88 15.31   30    69
GMGC    4.13 May   5.00  GGQEA   0.63 15.15  167  2822
MCOM    7.44 May   7.50  MQMEU   1.13 15.13   10    20
PROX   29.94 May  30.00  WQGEF   4.50 15.03    4     5
HPRT    5.00 May   5.00  HQKEA   0.75 15.00   20    20
CYCH   15.00 May  15.00  KBQEC   2.25 15.00  105    32
PCMS    7.50 May   7.50  PQPEU   1.13 15.00   56  2166
DGN    12.25 May  12.50  DGNEV   1.81 14.80    5   361
ZD     24.63 May  27.50   ZDEY   3.63 14.72   10   175
DAOU    6.38 May   7.50  QQXEU   0.94 14.71   17     4
REV    22.25 May  22.50  REVEX   3.25 14.61   49    47
VLNC    6.88 May   7.50  VHQEU   1.00 14.55    5    59
SFAM   12.25 May  15.00  FQFEC   1.75 14.29    2   207
PTEK    9.63 May  10.00  TQOEB   1.38 14.29  165  1799
SFSK    7.47 May   7.50  FQKEU   1.06 14.23    5   166
ARDT   14.94 May  15.00  KQVEC   2.13 14.23    4   222
BTC    14.56 May  15.00  BTCEC   2.06 14.16    5   104
KMAG    5.31 May   7.50  KMQEU   0.75 14.12  530   520
BEAM    9.38 May  10.00  BAQEB   1.31 14.00  458   321
SCIO    9.38 May  10.00  JQSEB   1.31 14.00  155   106
AMKR    7.31 May   7.50  QELEU   1.00 13.68   10    13
GADZ    7.38 May   7.50  EQKEU   1.00 13.56   63    57
BTIM   16.75 May  17.50  QBOEW   2.25 13.43   13    24
FGCI    7.06 May   7.50  JZQEU   0.94 13.27   91   441
ZD     24.63 May  30.00   ZDEF   3.25 13.20   68   222
PPOD   10.94 May  12.50  QPPEV   1.44 13.14   40    81
EGGS   19.06 May  20.00  EGQED   2.50 13.11   58   191
APM     4.31 May   5.00  APMEA   0.56 13.04  185   100
FORE   18.69 May  20.00  FQOED   2.44 13.04  500   911
LAW     7.19 May   7.50  LAWEU   0.94 13.04    2     2
AMMB    8.66 May  10.00  UKQEB   1.13 13.00    7   382
OMKT   14.00 May  15.00  OQMEC   1.81 12.95   98  1063
ESPI   10.69 May  12.50   AQEV   1.38 12.87   90    53
FFD     9.75 May  10.00  FFDEB   1.25 12.82   85   115
DRMD   11.25 May  12.50  DUQEV   1.44 12.78  111   354
ELY    10.00 May  10.00  ELYEB   1.25 12.50   15  1486
PGNS   11.00 May  12.50  PHQEV   1.38 12.50  120    27
WSTL    4.03 May   5.00  QLWEA   0.50 12.40   15   404
MAST   14.19 May  15.00  QACEC   1.75 12.33    5    25
CPWR   23.94 May  25.00  CWQEE   2.94 12.27   66   525
ESCMF   7.16 May   7.50  QFCEU   0.88 12.23    5    60
TERA    6.69 May   7.50  QIPEU   0.81 12.15   50    47
SUGN   17.50 May  17.50  UGQEW   2.13 12.14    9   331
SBTK   16.63 May  17.50  XQYEW   2.00 12.03   32   223
ENMD   22.88 May  25.00  QMAEE   2.75 12.02   16   547
SCUR   11.13 May  12.50  UQUEV   1.31 11.80   25    75
SKYT   18.06 May  20.00  MMQED   2.13 11.76  168    25
UBS    11.69 May  12.50  UBSEV   1.38 11.76    3   790
ANIK    4.81 May   5.00  AKQEA   0.56 11.69   10   174
IOM     4.81 May   5.00  IOMEA   0.56 11.69  284  5245
PAH     4.81 May   5.00  PAHEA   0.56 11.69   42   303
IMCL   14.56 May  15.00  QCIEC   1.69 11.59   31   139
XIRC   29.38 May  30.00  XQREF   3.38 11.49   10    90
AND     6.56 May   7.50  ANDEU   0.75 11.43   25   471
IMNR    8.75 May  10.00  IMQEB   1.00 11.43  107   887
THQI   19.19 May  20.00  QHIED   2.19 11.40    4     5
IDC     4.94 May   5.00  IDCEA   0.56 11.39  165   615
ATRX   12.13 May  12.50  OQFEV   1.38 11.34   30   135
DURA   14.38 May  15.00  DQREC   1.63 11.30   37    13
AAIR    4.44 May   5.00  VJQEA   0.50 11.27  130   299
KLIC   23.31 May  25.00  KQSEE   2.63 11.26   26     5
KEG     4.50 May   5.00  KEGEA   0.50 11.11   10    10
PSSI    9.00 May  10.00  PYQEB   1.00 11.11   40   122
PTVL   17.50 May  20.00  QUTED   1.94 11.07    5   273
MMCN   15.00 May  17.50  CMQEW   1.63 10.83    5    21
VIRS   11.00 May  12.50  VQPEV   1.19 10.80    4     5
AHAA   18.56 May  20.00  GAQED   2.00 10.77   24    54
CEPH    9.88 May  10.00  CQEEB   1.06 10.76   50  2001
EDFY    5.81 May   7.50   YQEU   0.63 10.75   20    76
Z       7.00 May   7.50    ZEU   0.75 10.71   60  1521
EX     11.69 May  12.50   EXEV   1.25 10.70   10    68
PDLI   13.44 May  15.00  PQIEC   1.44 10.70   10    60
HTCH   20.44 May  22.50  UTQEX   2.19 10.70   47    28
SMOD   14.13 May  15.00  UYQEC   1.50 10.62   10   200
AVID   23.00 May  25.00  AQIEE   2.44 10.60    5    25
CBR    19.06 May  20.00  CBRED   2.00 10.49    5   584
APCC   28.63 May  30.00  PWQEF   3.00 10.48    2    30
PAGE    4.19 May   5.00  PGQEA   0.44 10.45   30    40
HYSL   15.00 May  15.00  WQEEC   1.56 10.42   20   170
REV    22.25 May  25.00  REVEE   2.31 10.39   36   116
SEV     4.81 May   5.00  SEVEA   0.50 10.39   80     8
NSM     9.69 May  10.00  NSMEB   1.00 10.32   86   657
SGI    14.56 May  15.00  SGIEC   1.50 10.30   47  1823
MGM    12.19 May  12.50  MGMEV   1.25 10.26   20    35
PETC    9.75 May  10.00  QPTEB   1.00 10.26   13    60
IM     18.31 May  20.00   IMED   1.88 10.24  353    40
TECD   16.50 May  17.50  TDQEW   1.69 10.23   12    10
IDTC   17.19 May  20.00  IQJED   1.75 10.18   75   376
VRC    12.31 May  12.50  VRCEV   1.25 10.15   35   149
MYGN    9.25 May  10.00  GSQEB   0.94 10.14    6    58
REMC   19.75 May  20.00  RYQED   2.00 10.13   20    60
CLST   11.13 May  12.50  EQLEV   1.13 10.11   34   413
PMTC   19.81 May  20.00  PMQED   2.00 10.09   35  1109
KWP    29.94 May  30.00  KWPEF   3.00 10.02   21   804
CYCH   15.00 May  17.50  KBQEW   1.50 10.00   36    74
SAVLY  12.50 May  15.00  QVYEC   1.25 10.00   10   489
GCTI   14.38 Jun  15.00  QHFFC   3.38 23.48    3   148
TLXN   11.88 Jun  12.50  TNQFV   2.56 21.58   42   251
VLNC    6.88 Jun   7.50  VHQFU   1.38 20.00   31   787
TECD   16.50 Jun  17.50  TDQFW   3.25 19.70   24    38
TERA    6.69 Jun   7.50  QIPFU   1.25 18.69    3  1007
BTIM   16.75 Jun  17.50  QBOFW   3.13 18.66   29   421
GSTRF  14.75 Jun  15.00  YVQFC   2.69 18.22   20   103
SEV     4.81 Jun   5.00  SEVFA   0.88 18.18   40   450
BEAM    9.38 Jun  10.00  BAQFB   1.69 18.00  162   932
AMMB    8.66 Jun  10.00  UKQFB   1.50 17.33   10  1099
PGNS   11.00 Jun  12.50  PHQFV   1.88 17.05   43    81
DGN    12.25 Jun  12.50  DGNFV   2.06 16.84   16   309
PROX   29.94 Jun  30.00  WQGFF   5.00 16.70    6   169
FFD     9.75 Jun  10.00  FFDFB   1.63 16.67   40   177
UBS    11.69 Jun  12.50  UBSFV   1.94 16.58   65  1259
ESPI   10.69 Jun  12.50   AQFV   1.75 16.37   12   533
LAW     7.19 Jun   7.50  LAWFU   1.13 15.65   75   173
WALK    4.00 Jun   5.00  OQWFA   0.63 15.63   10    24
CYGN    8.00 Jun  10.00  YNQFB   1.25 15.63   20    86
HBI     4.44 Jun   5.00  HBIFA   0.69 15.49   10   458
AAIR    4.44 Jun   5.00  VJQFA   0.69 15.49   70  1057
AFCI    7.38 Jun   7.50  AQFFU   1.13 15.25   90   636
GEMS    3.69 Jun   5.00  GQMFA   0.56 15.25   20   534
MCHM    9.88 Jun  12.50   QQFV   1.50 15.19   20   567
BEV     5.00 Jun   5.00  BEVFA   0.75 15.00   20  1175
CERN   16.00 Jun  17.50  CQNFW   2.38 14.84    6   384
MAST   14.19 Jun  15.00  QACFC   2.06 14.54   10    32
GGUY    3.50 Jun   5.00  GQUFA   0.50 14.29   10   144
ASYT   14.50 Jun  15.00  QQYFC   2.06 14.22   50   175
VRC    12.31 Jun  12.50  VRCFV   1.75 14.21   25   556
ORB    24.69 Jun  25.00  ORBFE   3.50 14.18    5   480
CELL    5.81 Jun   7.50  QEFFU   0.81 13.98   31  1570
SSSS    7.19 Jun   7.50  SVQFU   1.00 13.91  115   103
SKYT   18.06 Jun  20.00  MMQFD   2.50 13.84  156   935
IDTC   17.19 Jun  20.00  IQJFD   2.38 13.82   27   589
APEX   13.44 Jun  15.00  PXQFC   1.81 13.49   25    47
BTIM   16.75 Jun  20.00  QBOFD   2.25 13.43   21   213
DUSA    8.38 Jun  10.00  QDUFB   1.13 13.43   15    34
OEI     6.56 Jun   7.50  OEIFU   0.88 13.33  101  3869
CATP   10.94 Jun  12.50  TQPFV   1.44 13.14   11   857
MMWW   14.00 Jun  15.00  EQBFC   1.81 12.95   20    80
ROMC    8.69 Jun  10.00  RPQFB   1.13 12.95    1    38
GIC    29.94 Jun  30.00  GICFF   3.88 12.94   14   768
IST     7.31 Jun   7.50  ISTFU   0.94 12.82    3    64
XIRC   29.38 Jun  30.00  XQRFF   3.75 12.77    1    74
EXCA   13.94 Jun  15.00  XQAFC   1.75 12.56   13    78
MDM     4.50 Jun   5.00  MDMFA   0.56 12.50  220  2833
IM     18.31 Jun  20.00   IMFD   2.25 12.29    9    95
APCC   28.63 Jun  30.00  PWQFF   3.50 12.23   13   227
DRMD   11.25 Jun  15.00  DUQFC   1.38 12.22   12   151
EGGS   19.06 Jun  22.50  EGQFX   2.31 12.13    5   634
TECD   16.50 Jun  20.00  TDQFD   2.00 12.12   10   351
CYCH   15.00 Jun  17.50  KBQFW   1.81 12.08    5  1550
STAR   10.88 Jun  12.50  LQSFV   1.31 12.07    2   123
KELL   13.56 Jun  15.00  KQCFC   1.63 11.98   10    33
PAGE    4.19 Jun   5.00  PGQFA   0.50 11.94    8   915
ADIC   15.75 Jun  17.50  QXGFW   1.88 11.90   20    75
VVUS    3.69 Jun   5.00  VVQFA   0.44 11.86   19  2180
ATMI   19.00 Jun  20.00  ASQFD   2.25 11.84    2    42
CHRZ   11.13 Jun  12.50  ZQHFV   1.31 11.80    9   132
SYBS    6.47 Jun   7.50  SBQFU   0.75 11.59   21   923
ESCC   14.06 Jun  15.00  EQAFC   1.63 11.56    5     5
SKYT   18.06 Jun  22.50  MMQFX   2.06 11.42   37   536
HPK     9.88 Jun  10.00  HPKFB   1.13 11.39   15    51
OCR    17.75 Jun  20.00  OCRFD   2.00 11.27   10    35
GHV     6.69 Jun   7.50  GHVFU   0.75 11.21   40   186
ARX    13.50 Jun  15.00  ARXFC   1.50 11.11  102    72
ZITL    2.25 Jun   5.00  ZQIFA   0.25 11.11  130  2546
GSTRF  14.75 Jun  17.50  YVQFW   1.63 11.02   20   988
HMAR    4.00 Jun   5.00  VQHFA   0.44 10.94   15   152
VTEL    3.44 Jun   5.00  VQEFA   0.38 10.91    4   692
GCO     9.25 Jun  10.00  GCOFB   1.00 10.81   10    31
WND     6.94 Jun   7.50  WNDFU   0.75 10.81   15   644
FEET   11.94 Jun  12.50  JQFFV   1.25 10.47   15   430
ESV    14.00 Jun  15.00  ESVFC   1.44 10.27  635  1315
DGN    12.25 Jun  15.00  DGNFC   1.25 10.20   13   547
CNDS    6.13 Jun   7.50  KQNFU   0.63 10.20   30   357
DIIG   28.38 Jun  30.00  QIDFF   2.88 10.13   15   131
BEAS   15.50 Jun  17.50  BRQFW   1.56 10.08   72  1404

Technical Indicators...Advance/Decline Line

The advance decline line is a cumulative total of the number of
advancing issues minus the number of declining issues. The common
interpretation of advances and declines uses those figures from
the NYSE trading on a daily basis. A cumulative advance-decline
line can then be calculated by first subtracting the number of
NYSE declining issues (declines) from the number of advancing
issues (advances) daily and then keeping a running sum of those

The advance-decline numbers are an effective gauge of the general
trend in the majority of issues but they can be quite subjective
in interpretation. Most technical experts try to examine the large
divergence's in the indicator to help form an opinion or bias
about upcoming market moves but this is not a traditional forward
looking indicator.

If you examine a chart comparing the performance of the S&P 500
Index ($SPX) with the cumulative NYSE advance-decline line, you
will notice the divergence has reached extreme proportions. The
S&P is rising to new highs while the A/D line has fallen to new
lows (below the low point reached last October). This type of
activity is generally viewed as a negative indication but some
fundamental analysts downplay this assessment based on the fact
that a small group of stocks can carry the market (Dow) higher.
These experts suggest that the top 50 stocks, a 2/3 majority of
the S&P 500 weighting, can continue to drive the broad market
with higher prices (and corresponding P/E ratios) well into the

Most analysts agree that these divergences can exist for a long
time (the current one started early last year) before the market
will show signs of significant retreat. Lets hope they remember
the last time the Dow made new yearly highs and the A/D line made
new yearly lows...it was August, 1929.
                   *** SELLING NAKED PUTS ***
Selling naked-puts offers an attractive method of generating small
profits on portfolio collateral. A premium is received for the
obligation to buy the underlying security at a specific price. A
successful outcome is achieved if the stock remains above the sold
strike at expiration. It is also one of the best ways to achieve a
technically correct entry position for owning a stock.
                      *** WARNING!!! ***
Occasionally a company will experience catastrophic news causing
a severe drop in the stock price. This may cause a devastatingly
large loss which may wipe out all of your smaller gains. There is
one very important rule; Don't sell naked puts on stocks that you
don't want to own! It is also important that you consider using
trading STOPS on naked option positions to help limit losses when
the stock price drops. Many professional traders suggest closing
the position when the stock price falls below the sold strike or
using a buy-to-close STOP at a price that is no more than twice
the original premium from the sold option.
Stock  Price  Last    Mon  Strike  Opt   Profit    ROI   Monthly
Sym    Picked Price        Price   Bid   /Loss           ROI

DRMD    6.81  11.25   Apr   5.00  0.44  *$  0.44  24.4%  26.6%
ARTT    8.38  12.63   Apr   7.50  0.75  *$  0.75  23.3%  20.2%
NDB    25.13  26.75   Apr  20.00  1.06  *$  1.06  17.4%  18.9%
MCHM    9.75   9.88   Apr   7.50  0.56  *$  0.56  22.3%  16.2%
AMMB    9.88   8.66   Apr   7.50  0.44  *$  0.44  18.2%  15.8%
FORE   13.13  18.69   Apr  10.00  0.50  *$  0.50  16.0%  14.7%
ZD     25.06  24.63   Apr  17.50  0.75  *$  0.75  13.0%  14.1%
MCHM   10.31   9.88   Apr   7.50  0.38  *$  0.38  15.6%  13.5%
EGGS   19.69  19.06   Apr  15.00  0.50  *$  0.50  11.3%  12.2%
COOL   20.81  20.50   Apr  15.00  0.50  *$  0.50  10.7%  11.7%
PWAV   27.06  25.88   Apr  22.50  0.63  *$  0.63   9.1%   9.9%
RCNC   31.31  37.38   Apr  25.00  0.50  *$  0.50   7.4%   8.0%
ITX    15.06  13.81   Apr  12.50  0.31  *$  0.31   8.2%   7.1%
WKR    21.38  22.88   Apr  17.50  0.38  *$  0.38   7.5%   6.5%
NWAC   25.69  26.56   Apr  22.50  0.50  *$  0.50   6.6%   5.7%

** We will take credit for the successful forecast on ITVU last
   week but because of the "gap-up" at the open, our play was

-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   20.63  Apr 15.00  QOO PC  0.38  278   14.62   8.43%
CYCH   15.00  Apr 12.50  KBQ PV  0.38  174   12.12   9.79%
NDB    26.88  Apr 22.50  NDB PX  0.81  161   21.69  11.28%
PROX   30.00  Apr 25.00  WQG PE  1.13  10    23.87  13.90%
WAVO    9.25  Apr  7.50  WKQ PU  0.44  252    7.06  18.41%
XCED   12.38  Apr 10.00  XCU PB  0.44  0      9.56  14.61%
ZD     24.63  Apr 17.50   ZD PW  0.63  692   16.87  11.34%
Sequenced by Return on Investment  
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

WAVO    9.25  Apr  7.50  WKQ PU  0.44  252    7.06  18.41%
XCED   12.38  Apr 10.00  XCU PB  0.44  0      9.56  14.61%
PROX   30.00  Apr 25.00  WQG PE  1.13  10    23.87  13.90%
ZD     24.63  Apr 17.50   ZD PW  0.63  692   16.87  11.34%
NDB    26.88  Apr 22.50  NDB PX  0.81  161   21.69  11.28%
CYCH   15.00  Apr 12.50  KBQ PV  0.38  174   12.12   9.79%
COOL   20.63  Apr 15.00  QOO PC  0.38  278   14.62   8.43%
Company Descriptions
COOL - Cyberian Outpost  $20.63     *** 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 still favorable with support near $15. The company plans to
release the upcoming earnings report on 3/29 and broadcast the
conference call live on the internet.

Apr  15.00  QOO PC  B=0.38  OI=278  CB=14.62  ROI=8.43%

Chart = http://quote.yahoo.com/q?s=COOL&d=3m
CYCH - Cybercash  $15.00     *** Internet Commerce ***

CyberCash's products and services help consumers make online
purchases securely and simply. The company offers secure payment
transaction services that encrypt credit card information. They
also have electronic cash billing/payment software. The company's
ICVerify subsidiary provides retailers with point-of-sale credit
card authorization software for customers like AOL and IBM. They
just announced the first reseller deal (with Concentric Network) 
to deliver a completely integrated solution designed to make it
quick and easy for businesses to establish their e-commerce Web
sites with CYCH as their billing/payment solution.

Apr  12.50  KBQ PV  Bid=0.38  OI=174  CB=12.12  ROI=9.79%

Chart = http://quote.yahoo.com/q?s=CYCH&d=3m
NDB - National Discount Brokers  $26.88   *** 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. Excellent technical support at $20
and closed at the high on Friday with increasing volume.

Apr  22.50  NDB PX  Bid=0.81  OI=161  CB=21.69  ROI=11.28%

Chart = http://quote.yahoo.com/q?s=NDB&d=3m
PROX - Proxim  $30.00     *** LAN Leader! ***

Proxim is one of the leading makers of portable, wireless LAN
access components. Wireless LANs transmit and receive data over
the air via radio waves, and Proxim makes the radio-frequency
modules and wireless adapters that are used by manufacturers in
products such as handheld data-collection terminals, notebooks,
and pen-based notepads. Frost & Sullivan recently said that PROX
has the leading share of worldwide wireless LAN unit shipments.
The current volatility in call option prices probably stems from
the upcoming earnings announcement due in mid-April. Some say the
report will come just after the strike date and that should make
for an interesting earnings run!

Apr  25.00  WQG PE  Bid=1.13  OI=10  CB=23.87  ROI=13.90%

Chart = http://quote.yahoo.com/q?s=PROX&d=3m
WAVO - Wavephore  $9.25     *** On the Rebound? ***

WavePhore offers wireless and Internet data broadcasting systems
and services. They supply wireless broadcasting equipment to news
and data providers worldwide. They deliver news and information
from hundreds of sources to 200,000 business users around the
globe. They also deliver information/entertainment to home PCs 
sing public television broadcasting signals. WAVO just announced
a group of new databases with expanded content and a wide spectrum
of interests with over 2500 additional titles. We like the solid
technical recovery back to the previous trading range near $8-$10.

Apr  7.50  WKQ PU  Bid=0.44  OI=252  CB=7.06  ROI=18.41%

Chart = http://quote.yahoo.com/q?s=WAVO&d=3m
XCED - Exceed Inc.  $12.38

ExCeed is a new company in a new industry. They shifted from burn
treatment products to corporate services. They have a subsidiary
Journeycraft's Performance Group, that provides improvement and
incentive programs for employees, while another division provides
corporate travel services. The TheraCom Medical Communications
subsidiary offers training and education programs to health care
professionals. In 1998 the company acquired new media companies
Reset and Mercury Seven, which provide Internet consulting and
marketing services, and Zabit & Associates, a corporate services
firm. A nice break-out on solid volume and support near our cost

Apr  10.00  XCU PB  Bid=0.44  OI=0  CB=9.56  ROI=14.61%

Chart = http://quote.yahoo.com/q?s=XCED&d=3m
ZD - Ziff-Davis  $24.63     *** 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!
They plan to offer 10 million shares in the $11-$13 range and may
use the money to buy CMP Media, a high-tech publishing company.

Apr  17.50  ZD PW  Bid=0.63  OI=692  CB=16.87  ROI=11.34%

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



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