Option Investor
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Daily Newsletter, Sunday, 04/18/1999

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The Option Investor Newsletter            Sunday  4-18-99  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
******************************************************************
MARKET STATS FOR LAST WEEK AND PRIOR WEEKS
******************************************************************
        WE 4-16           WE 4-9           WE 4-2           WE 3-26
DOW    10493.89 +320.05 10173.84 +341.33  9832.51 + 10.27   - 81.31  
Nasdaq  2484.04 -109.01  2593.05 + 99.68  2493.37 + 74.20   -  2.10  
S&P-100  668.65 - 12.69   681.34 + 31.42   649.92 +  6.24   -  6.43  
S&P-500 1319.00 - 29.35  1348.35 + 54.63  1293.72 + 10.92   - 16.49  
RUT      421.58 + 15.72   405.86 +  7.12   398.74 +  4.82   -  2.66  
TRAN    3528.70 +158.30  3370.40 + 61.24  3309.16 + 49.05   - 78.37  
VIX       25.48            22.91            23.34            25.83
Put/Call    .63              .54              .62              .50
******************************************************************

Techs, drugs and Rock and Roll....


Three of the sectors that took some serious hits last week. The
drug sector on the heals of the Pfizer earnings and lower guidance,
the tech sector on weak earnings by SunMicro and the entertainment
sector even after Time Warner posted earnings of +$.10 when estimates
were for a -$.04. TWX dropped -$12 after the incredible earnings
performance and the Fidelity Magellan fund said they were going to
add to their already large position in the solid company. Go figure?
When sectors rotate no stock is a safe haven.

That was the key for the week, rotation. Investors moved out of 
everything tech and internet and into anything with a low double
digit PE that had been beaten down for the last few months. What
prompted the flight from tech stocks with +30-40-50% earnings to
cyclical and economically sensitive stocks with +10% earnings is
still a mystery. Did I miss the email that finally convinced traders
that triple digit PE ratios were bad? Value investors have been
scratching their heads and trying to convince the momentum players
for years that the PE bubble was going to burst someday. Did I miss
the pop or is that hissing sound coming from the Nasdaq last week
the beginning of a slow leak?

The news and warnings by several companies of Y2K concerns, and 
dwindling PC sales driven by companies working on the problems,
may have finally pushed investors over the edge. What has been
the major factor driving new tech sales for the last two years,
other than the Internet, appears to have finally run it's course.
Brokerages are downgrading tech stocks daily and the dog pile has
begun. One of the best this week was from Merrill Lynch. On Friday
they cut SUNW strictly on price. Stating they love the stock but
can't support their buy recommendation at these lofty levels they
dropped their buy to an accumulate. Why is this strange? When
SUNW was trading at $145 two weeks ago they had a buy rating. Now
that they are trading at $109 it is too high! A -25% drop in price
but it is now too high. Come on guys, admit it. You are just trying
to let your investors down easy and not open yourself up to any
complaints from your clients.

With SUNW warning that the fourth quarter will not be seasonably
strong and the recent leaders being taken out and shot, the title
for next weeks trading could be "The Search for Leadership." 
On Friday the Nasdaq 100 only had 28 stocks closing positive and
it was definitely not the usual suspects. Only eight were up more
than $1.00. The "leaders" on Friday were TLAB +5.56, ADBE +3.06,
CEFT +1.75, BBBY +1.63, ADSK +1.38, CTXS +1.31, STEI +1.19, AMFM
+1.13. Not exactly an inspiring group. TLAB was a dead cat bounce
from a -16 drop the two days before. ADSK was bouncing from a -50% 
drop in the last two weeks. CTXS is at a six month low. ADBE is
on a plateau at a six month high, CEFT and STEI actually look decent 
climbing out of a long declines. BBBY and AMFM were neutral in my
opinion. Compared with the recent big Nasdaq gainers they all 
would have been play rejects. 

Don't think just because the Dow set it's fifth record in a row
on Friday that it just qualified in the iron man contest either.
Fridays performance was purely on the backs of only three stocks.
Eastman Kodak, on a positive earnings announcement AND an announced
buyback of $2 billion in stock. The other two were the oil sector
giants Chevron and Exxon, both riding the heals of the $17.33 oil.
The gains of these three EK +6.44, CHV +3.13, XON +2.38 accounted
for +53.77 Dow points. The Dow closed up only +31.20. Without these
three stocks we would have been negative -22.57.

The recent rise of the cyclical stocks may have run its course.
Almost everyone we looked at this weekend appeared to have topped
on Friday. This could have been just profit taking from the big
gains last week or just a reluctance to apply more money before 
the weekend but still a cause for concern.

The liquidity driven rally from the last month may be coming to 
a penny pinching halt. The pre-tax retirement fund deposits have
now passed and their may be selling to cover the tax bills of the
last minute filers. The earnings season is in full bloom with
this coming week the most active for the month. Since most investors
understand the concept that you should not hold over earnings
then it stands to reason that the biggest earnings weeks would
be the biggest selling weeks as well. Investors will move into
stocks that announce in May for a final earnings bump before the
summer doldrums drop appears. It is entirely possible that the more
cautious stock (not option) investors will start moving to the
safety of money markets well in advance of the coming Y2K period.

While I do not want to enforce any negative views of the possible
negative consequences of the Y2K event, I do feel the need to 
report on the possibilities. At the recent seminars I had the
opportunity to speak with hundreds of investors. MANY expressed
a similar view that the market could move downward for the rest
of the year after this earnings period. I know many people already
converting stocks to cash to protect the investments they have 
spent years accumulating. While I feel personally that the Y2K
event may have no direct impact or at best only minimal inconveniences
to most, I also feel the perception of the event will be the major
problem. The media is full of dire warnings by thousands of people
trying to make a name or a buck out of Y2K. This will only increase
in volume and intensity the closer we get. Therefore the perception
of the event as a possible catastrophe will grow as well. As an
option trader I view any major event that moves the market as a
tremendous opportunity. If we do get a major sell off in advance
of Y2K I expect to profit well from it. But that is not the point.
The point is this. Most investors have been saving for their 
retirement for many years and have accumulated a large portfolio
of stocks. If they become fearful of the future, they will make
the phone call to move into the apparent safety of money markets.
Funds will start selling stocks to maintain liquidity. When this
starts, if at all, is anybody's guess. It is up to us to maintain
a watchful eye and NEVER assume the next drop is just a dip. As
option traders we are in and out of the market much quicker than
stock traders. We can also play either way, up or down, for the
same amount of money. After several weeks of rally here we need
to be watchful for a trend change. 

Now after talking about a possible direction change in the market
I must mention the apparent direction change in three of the 
most watched Dow confirmation indicators. The Russell-2000 the
transports and the advance decline line. All have made dramatic 
moves in the last several weeks. The Russell broke above 400 
after two months of unsuccessful attempts. 

While I think the RUT is being moved on the surface by the huge
increases in the Internet and brokerage stocks I wrote about 
last week, I do see some movement in the broader and smaller
issues. There is new life in the smaller stocks. Why, at this
point, is unknown. Maybe it is simply a flight out of the expensive
big caps and a broadening of the market brought on by the Dow
10,000 rally. After Dow 10K the general consensus was that the
big caps were grossly over valued and this could be the result.
In any event, as long as the Russell continues upward it will be
hard for the larger averages to go down dramatically.

Secondly the Transports are very close to the all time high set
in April of 1998. Dow theorists see the transports confirming
the recent Dow rally. This is also amazing in the light of the
rise in oil prices from $11 to over $17 in the same period. Oil
is a major cost factor in the transportation sector. This transport
rally again defies the odds.

Even more amazing is the turnaround in the advance/decline line.
On Friday the Dow was up only +31 on the backs of three stocks
yet the NYSE advances beat the decliners by the widest margin in
recent memory. 2053 to 1005, a more than 2:1 margin. 

  

Since the first week in April the downward trend which began
in April of 1998 has reversed. This is very positive for the
markets. If this holds then the rally should continue.

The recent Dow movement has been incredible. Up +707 points in
the last eleven days. A new Dow record high for seven of the 
last eight days. A very strong trend but also one that, like
Internet stocks, needs to breathe soon. When it does stop for
air we will be at a critical juncture. Each broken thousand
mark for the last three was followed by a large decline. We
have not seen that yet. If it can pause and maintain a level
above 10K then the next run could take us to 11K. Because of
the previous Y2K paragraph I will remain skeptical until after
the pause is over and the rally begins again. If you always
remain skeptical of unchecked market advances you will always
be ready to bail out to protect your gains when the next
correction occurs. My goal of this entire dissertation is to
simply make you aware of the possibilities which should make
you a better trader.

Last week we posted a readers write about certain hours of
the day and we were deluged with email asking for an explanation.
We had mentioned this many times in the past but it was just
something that was new to our new readers. We strongly advise
traders to not place any buys in the first 45-60 minutes of
trading each day. This is called amateur hour. Have you ever
noticed how the market tends to make sudden moves at the open
only to reverse those moves later. Friday was a prime example.
The futures were up prior to the open and the market opened up
+40 points or so and then sank -114 points to the low of the 
day, then rebounded +100 points from the low. All this happened
in the first hour of trading. This was extreme but an example
of the volatility in the first hour. We do recommend placing
sells at the open because most often the first movement is
upward. If you buy at the open you could be buying at the 
emotional high of the day more often than not. It is incumbent
for us as traders to establish a market direction before we
make our plays. The final direction on Friday was not determined
until after 11:AM. Trade during amateur hour only if you know
what you are doing. The next period is from 1:PM to 2:PM. 
During this period the market slows as traders try to grab some
lunch. It is strictly a human response in this electronic age
that we still need to eat. Picture hundreds of thousands of
brokers around the country all getting hungry at the same time.
Some work through lunch at their desk but there is still market
impact. This can be a good chance to buy if the market was up
in the morning. Stocks tend to pullback some between 1:00-2:00.
Lastly direction for the final hour of trading is normally 
determined between 2:55 and 3:05. You know the market tends to
move big in the closing hour. Your challenge is to decide by
3:10 which way it is going and play accordingly. Disclaimer:
These are trends which are true the majority of the time but
NOTHING is true ALL the time. Again, play the cards the market
deals us and know when to fold.

Good Luck

Jim Brown
Editor



*****************************************************
JIM'S PLAYS		 
*****************************************************

Fortunately I was able to close all my naked puts for
only token amounts. After the Compaq warning Friday week
I was prepared for the worst but a you know the market
shook it off and continued upward on Monday.

The bounce on Monday caught me by surprise and I was
not able to open any new positions based on my play
book and the market direction. I was expecting a pullback
so I held off until later in the week. A major fallacy
of not being entirely market neutral. When the Nasdaq
started to show weakness on Tuesday I picked out some
Internet stocks and waited for the bottom. 

On Thursday during the after lunch dip I bought EBAY, 
CMGI, AOL, GLBX, SEEK. They appeared to be the first 
ones to rebound from the 20 or so I was watching.

Unfortunately the bounce at the close on Thursday
proved to be a suckers rally and Friday was a disaster.
The bump was strong enough to produce profits in all 
five but I bailed early on Friday as soon as I saw the 
writing on the wall. CMGI was a decent winner but a 
very high risk play. I do not ever suggest playing 
options with only one day until expiration.
I just could not bring myself to paying the price for
May on CMGI. I was looking for a quick bump and run.
CMGI was $242 when I bought the APR 230 options at $17.
The time premium was only $5 with $12 intrinsic value.
The May 230 options were $44.50 at the time with a time
value of 32.50. With the -$100 drop in CMGI the previous
two days I felt there was not much risk and the possibility
of a strong bounce. As soon as it broke $240 moving up
on Thursday afternoon I bought it.

 

EBAY was another bounce play. The stock had dropped from
$178 to $155 but recovered quickly on the deal with
Butterfield and Butterfield. Since Ebay is a fast mover
and it recovered from the $155 dip almost instantly I
was ready to play as soon it came out of the second dip
around 2:PM. I caught the move from $165 to $180 for
a nice pop and I expected it to continue on Friday.
The drop at the open on Friday scared me out but it
was still a good play.

 

I am totally in cash and will be very selective about
my plays this week until I see what the market is going
to do.


Naked puts closed:

Mon NDB   APR-25 @ $1.00 closed @ .25 
Tue NDB   APR-30 @ $1.25 closed @ .13 
Mon EGRP  APR-65 @ $3.50 closed @ .25 
Tue EGRP  APR-75 @ $4.50 closed @ .25 

Calls bought Thursday sold Friday

THR EBAY  MAY-150 QXB-EJ @ $31.00 sold $38.25 profit  23%
THR CMGI  APR-230 GCB-DF @ $17.13 sold $39.00 profit 122%
THR SEEK  JUN-50  QI -FJ @ $16.63 sold $17.50 profit   5%
THR GBLX  MAY-50  QGV-EJ @ $ 5.88 sold $ 6.75 profit  15%
THR AOL   MAY-130 AOO-EF @ $23.25 sold $24.88 profit   7%

 
All cash, no open positions.




Market Sentiment - By Pinnacle Capital Advisors
***********************************************

A/D Line Resuscitated?

After drifting lower for more than five months, the 
Advance/Decline Line has been resuscitated and could serve as
fuel for a continued market rally. Moreover, the Russell 2000
has also recovered to its key 425 benchmark level - the level
where the index failed in January 1999. In the bearish camp, 
Pinnacle is concerned about what the 30-year interest rate and
Market Volatility Index (VIX) is doing. Interest rates is
backing up firming above the key 5.50 level its 200 day moving
average.  This may be signaling the end of declining rates over
the near term.  Also, keep an eye on the VIX.  The key level is 
(27.16). If the VIX closes above this level, it would break its 
50-dma again and could signal the end of its current trend.  This
would have bearish overtones.


BULLISH Signs:

Russell 2000              Trading above key 400 level.  Small
                          Caps in rally mode.

Advance/Decline Line      Beginning to flatten out and recover 


BEARISH Signs:

Market Volatility (VIX)   Challenging 50-day moving average
                          (27.16) after backing up on Friday
                          (4/17) at 25.48.

Interest Rates            Trading ABOVE 200dma and 5.50%
                          Benchmark. (5.565%)
                          


 





OTM Call Analysis

As we move into May's expiration cycle, Pinnacle is tracking 
the level of call buying (OTM) between 680-740 among option
speculators. As we have been documenting, excessive out-of-the-
money (OTM) call may serve as overhead resistance.


April Expiration Cycle
OEX OTM Call Analysis (Open Interest Apr 650-700)
Date                 Open Interest     Change %    Alert
-----------------------------------------------------------------
Friday, March 19            35,626         -
Friday, March 26            60,266      +69.2%     
Friday, April 2             70,952      +99.2%     
Friday, April 9             74,028     +107.8%     

May Expiration Cycle
OEX OTM Call Analysis (Open Interest May 680-740)
Date                 Open Interest     Change %    Alert
-----------------------------------------------------------------
Friday, April 16            30,697         -


Market Sentiment at a Glance    Friday     Tues      Thurs  
Indicator                       (4/9)     (4/13)     (4/15) Alert
******************************************************************

Pinnacle Index (OEX):          
Overhead Resistance (680-695)     2.6     
Underlying Support  (645-660)     1.4  

Put/Call Ratios:
CBOE Total P/C Ratio               .7
CBOE Equity P/C Ratio              .5                 
OEX P/C Ratio                     1.6


Peak Open Interest (OEX):
Puts                              520
Calls                             695
P/C Ratio                        1.19                


Market Volatility Index (VIX):	
-------------------------------------
CBOE VIX                        25.48                  



Investors Intelligence:
--------------------------------------
Bullish                         55.9% *  
Bearish                         30.5% *		



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                       (4/16)      (4/20)    (4/22)
               
                    (690-695)      8.8
                    (680-685)      1.5
Overhead Resistance (660-675)      2.6

OEX Close                       668.65  

Underlying Support  (645-660)      1.4
(655-660)	1.7
                    (645-650)      1.2
 
Average ratings: 
Resistance levels 2.0 / Support Levels .5

What the Pinnacle Index is telling us:
Overhead sentiment resistance is building at the OEX 680/695 
level while the underlying support is only moderate at the
OEX 645/660 level.


Put/Call Ratio                  Friday      Tues       Thurs
Strike/Contracts                 (4/16)     (4/20)     (4/22)

CBOE Total P/C Ratio               .67
CBOE Equity P/C Ratio              .47
OEX P/C Ratio                     1.64


Peak Open Interest (OEX) Friday         Tues         Thurs
Strike/Contracts        (4/16)         (4/20)        (4/22)
-----------------------------------------------------------------
Puts                   650 / 7,383
Calls                  720 / 6,754
Put/Call Ratio         1.09

 





(VIX)
Market Volatility Index 
Date            Major 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   

April 16, 1999                          25.48 *


 



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     
March 31, 1999                        55.6        31.6     

April 7, 1999                         56.4        31.6     
April 14, 1999                        55.9        30.5  *   


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

DOW Industrials    9,750  10,000  10,494    BULLISH   4.7
SPX S&P 500        1,300   1,350   1,319    Neutral   4.14
OEX S&P 100          660     680     669    Neutral   4.14
RUT Russell 2000     390     400     422    BULLISH   4.9
NDX NASD 100       2,075   2,250   2,086    Neutral   4.12
MSH High Tech        975   1,115   1,020    Neutral   4.12

                   Key Benchmarks
Technology         Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
XCI Hardware         875     900     848    BEARISH   4.14
CWX Software         600     650     619    Neutral   4.6
SOX Semiconductor    375     420     395    Neutral   4.12
NWX Networking       450     490     474    Neutral   4.12
INX Internet         550     700     600    Neutral   4.15

                   Key Benchmarks
Financial          Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
BIX Banking          675     720     712    Neutral   4.14
XBD Brokerage        400     540     454    Neutral   4.14
IUX Insurance        625     655     633    Neutral   3.19

                   Key Benchmarks
Other              Bearish/Bullish  Last    Posture/Since  Alert
****************************************************************
RLX Retail           900     970     892    BEARISH   4.16 *
DRG Drug             390     425     385    BEARISH   4.14
HCX Healthcare       780     850     774    BEARISH   4.14
XAL Airline          170     185     183    Neutral   3.30
OIX Oil & Gas        250     260     290    BULLISH   3.30



Posture Alert

The Dow Jones Industrial average printed a new closing high 
but we remain largely Neutral across the broad market
indices and industry sectors. We have added Retail sector
to the Bearish camp after trading below its breakout
level of 900.

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

www.OptionInvestor.com/marketposture
 


***************************************
Last weeks change for this weeks picks:
***************************************

Index     Last     Week
Dow    10493.89   320.05
Nasdaq  2484.04  -109.01
$OEX     668.65  - 12.69
$SPX    1319.00  - 29.37
$RUT     421.58    15.75
$TRAN   3528.70   158.30
$VIX      25.48     2.57

Stock             Week

MOB      101.63   7.63 New,Earnings 4/23,oil is strong
CI        89.94   7.25 New, setting new highs!
AMZN     190.00   7.12 Earnings 4/28, split candidate
AVP       56.19   7.00 New,Earnings 4/22,high expectations
UCL       40.88   4.56 New,Earnings 4/27,oil is strong
F         64.88   4.32 New, earnings up 20%,defensive stock
EGRP      92.56   2.43 Dropped, Earnings are 4/20
DCX       96.94   2.38 Earnings are 4/28
AEOSD     81.13   1.12 Splits 2:1 on May 3rd
PVN      119.25   0.25 Earnings are 4/22
MFNX      66.75  -0.62 Splits 2:1 on May 18th
UNPH     126.81  -2.95 Dropped, tech sell-off casuality
LVLT      81.69  -3.06 Earnings Friday 4/23
QCOM     142.50  -3.06 Dropped, Earnings are 4/20
CMGI     260.88  -3.50 Splits 2:1 late May
BRCM      70.13  -3.87 Dropped, Earnings are 4/20
JBL       44.31  -4.82 Dropped, not moving
DELL      38.25  -5.31 New, Earnings are May 17th
QWST      82.00  -7.00 Dropped, tech sell-off casuality
VOD      180.69 -15.45 Dropped, tech sell-off casuality
AOL      139.75 -20.19 Earnings 4/27, split candidate
EMC      107.25 -27.63 Dropped, Earnings are 4/20
RNWK     170.50 -37.00 Dropped, Earnings are 4/20

Puts

ATHM     144.94 -27.69 New,Earnings over/sell-off in progress
SEPR      94.00 -23.38 Doubled their losses from 4Q98
ELNK      68.75 -20.25 New,Earnings over/sell-off in progress
NSOL      89.75 -18.25 New,Getting beat up(Internet weakness)
ELN       60.00 -16.81 New, Drug sell-off casuality
IBM      170.38 -15.93 New,Investors worried about earnings
GDT       52.63 -12.62 New,Very cautious conference call
AMGN      66.81 -11.25 New, Earnings are 4/21, below 50 dma
SCH      114.81  -9.19 New,Earnings over/sell-off in progress
BGEN     105.50  -8.94 Split announcement no help
GTW       64.19  -8.56 New,weak sector,Earnings 4/22
COST      81.69  -8.19 New, Broke through 50 dma
DLJ       79.38  -6.63 New,Earnings over/sell-off in progress
RMBS      65.75  -6.19 Unimpressive outlook for 1999
VIA.B     40.88  -5.50 New, Consolidating, Earnings 4/28
WCOM      84.75  -5.31 New,Getting punished in tech sell-off
AET       76.19  -2.44 Still under selling pressure
CAH       67.06  -0.38 New, Earnings are 4/21
EGRP      92.56   2.43 New,Earnings over/sell-off in progress
AMTD     126.00  10.44 New,Earnings over/sell-off in progress




*****************************************************
Coming Events
*****************************************************
Monday: 

None

Tuesday:

LJR Redbook         4/17   Forecast:  --     Previous: -0.5%
API Oil Stocks      4/16   Forecast:  --     Previous: 1.04M
Intl Trade          Feb    Forecast: -$16.9B Previous: -$16.99B

Wednesday:

None

Thursday:

Jobless Claims     4/17    Forecast:  315K   Previous: 316K 
Money Supply(M2)   4/5     Forecast:  --     Previous: $8.8B

Friday:

None



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*****************************************************
DISCLAIMER
*****************************************************
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          4-18-99
Sunday             Part 3 of 6


****** Plays continued

PVN - Providian Financial $119.25 (+0.25)(+9.56)(+1.75)(-.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.

PVN got off light compared to some of the financials suffering 
from recent profit taking.  On Thursday, PVN fell in sympathy 
with the sector to a -$6.69 loss.  However, it was right back 
on track Friday.  Even though it was up only +$0.38, we feel 
that it still has some spark left in it.  It will announce its 
earnings on Thursday April 22nd.  Remember that we never 
recommend holding over the actual announcement.  Several of its 
fellow bankers have suffered from profit taking since announcing 
their earnings and we feel it is better to close open positions 
ahead of time.  Learn from what similar companies have done to 
protect your profits. 

The new earnings date (4/22) has been confirmed with the 
company.

BUY CALL MAY-115 PVN-EC OI= 88 at $13.75 SL=11.25 ITM $4.25
BUY CALL MAY-120*PVN-ED OI=349 at $11.50 SL= 9.50
BUY CALL JUN-115 PVN-FC OI= 87 at $16.13 SL=12.50 ITM $4.25
BUY CALL JUN-120 PVN-FD OI=112 at $13.63 SL=11.25

Picked on Mar 28th at $107.69      PE = 58
Change since picked  +$ 11.56      52 week low =$ 28.38
Analysts' ratings   7-5-2-0-0      52 week high=$129.75
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 = 805.5 K
Chart = http://quote.yahoo.com/q?s=PVN=3m

*********
Internet
*********

AMZN - Amazon.com, Inc $190.00 (+7.12)(+11.88)(+31.94)

Amazon.com uses the Internet to sell books, CDs, and videos.  
They're billed as the largest bookstore retailer in the world.  
They offer almost 5 mln different choices - including 
out-of-print titles - at discounts of up to 40%.  Amazon 
buys directly from distributors or publishers and typically 
delivers an order to its customers within 2-3 days. They are 
presently expanding into other Web-based enterprises.

AMZN kicked its way back into the game on Friday.  The stock 
catapulted ahead +22.75 in heavy trading to finally close in 
the 190s. Congratulations to the aggressive players who used 
the lows this week as profitable entry points.  AMZN's only
opposition now is overhead resistance at its 52 week high of 
$199.12.  The spike on Friday positioned the stock 10+ points 
above its 10 dma - a very bullish indication.  This run up 
could easily continue considering the earnings report is 
expected to be positive and also, the possibility of another 
split just sweetens the deal.  Amazon confirmed they will 
announce on April 28th after the bell.  The Shareholder's 
Meeting to vote on increasing common shares from 300 mln 
to 1.5 bln is scheduled for May 20th.  This increase would 
provide the Board of Directors with plenty of shares for 
another stock split.

Jamie Kiggen, analyst for DLJ, raised the target price for 
AMZN to $280 from $190 and let it be known this stock was 
her "top pick", an upgrade from "buy". She based her 
decision on Amazon's offensive move into the online auction 
business with "incremental revenues" as the projected result. 
On Monday, Amazon announced they will buy LiveBid.com for an
undisclosed amount.  The real-time software technology used 
by LiveBid.com was a major factor in the deal.  This move 
should further enhance Amazon's presence in Web Auction 
services.  

Internet stocks are very volatile and difficult to predict. 
So again, here's another reminder. Please use stops to protect 
your profits and sell too soon!

BUY CALL MAY-180 YQN-EP OI=2837 at $27.38 SL=21.25
BUY CALL MAY-190 YQN-ER OI=2761 at $23.25 SL=18.25
BUY CALL MAY-200*YQN-ET OI=2647 at $18.38 SL=14.00
BUY CALL MAY-210 YQN-EB OI= 792 at $15.25 SL=11.75 AGGRESSIVE
BUY CALL JUL-200 YQN-GT OI=1579 at $31.38 SL=24.00

Picked on April 2nd at   $171.00   PE = n/a
Change since picked       +19.00   52 week low =$ 12.87
Analysts Ratings       9-4-7-0-0   52 week high=$199.12
Last earnings 12/98 est= -.18   actual= -.14   surprise= 22.22%
Next earnings 04-28 est= -.29   versus= -.07
Average daily volume = 10.1 mln
Chart = http://quote.com/q?s=AMZN&d=3m

*****

AOL - America On Line $139.75 (-20.19)(+9.94)(P8W+68.00)

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.

You may be wondering why we keep AOL as a pick after 
dropping $20 in one week.  Good question.  Let's drill down 
to get the answer.  First, no matter what profit taking or 
temporary correction sets in, we're still in a bull market.  
Second, the Internet is here to stay.  Third, AOL is the 
largest and most profitable Internet company, bar none.  
Fourth and fifth are probably the most important.  AOL 
still has one week to go until they report earnings (April 
27 after the close) and are still a split candidate.  
Although protracted sector weakness could prevent or delay 
any split announcement.  AOL reaches strong support at its 
30 DMA, around $133.  Even with the drill-down reasoning, 
this is a risky Internet play.  Study the chart.  Do the 
research.  Unless you are a lightning-quick, itchy-trigger-
fingered gunslinger, luck won't help much.  Remember, the 
DOW has set 5 consecutive new highs and could free-fall at 
the slightest provocation.  AOL isn't immune.  Confirm 
market direction first with strong volume and use stops.

According to Dow Jones, the Fidelity Magellan Fund is said 
to be taking some profits and trimming its positions in 
well know tech stocks, AOL included; the fund has reduced 
its tech stocks holdings from 25.5% at the end of January 
to 20.9% as of March 31 (briefing.com).  In the world of 
monkey see, monkey do, there could be some early week 
residual sell-off.  The good news is that there are over 
28000 open interests in the 160-170 strike price range, 
which shows investors are highly expectant of the price 
rising to that level by May expiration.  Plan carefully 
and/or target shoot your way in.

BUY CALL MAY-135 AOO-EG OI= 1752 at $18.75 SL=14.50
BUY CALL MAY-140*AOO-EH OI= 8217 at $16.38 SL=12.75
BUY CALL MAY-145 AOO-EI OI= 6920 at $14.13 SL=11.25
BUY CALL MAY-150 AOO-EJ OI=23733 at $12.00 SL= 9.50 riskier
BUY CALL JUL-145 AOO-GI OI= 1832 at $22.63 SL=17.50
BUY CALL JUL-150 AOO-GJ OI= 5046 at $18.88 SL=14.75

Picked on March 14 at $96.13         PE = 730 (really!)
Change since picked   +43.62         52 week high=175.00
Analysts Ratings  23-8-0-0-0         52 week low = 16.69
Last Earnings 01/99  est .09 actual .09 surprise =0%
Next Earnings 04-27  est .09 versus .04
Average daily volume =  22.5 mln. 
Chart = http://quote.yahoo.com/q?s=AOL&d=3m

*****

CMGI - CMGI, Inc. $260.88 (-3.50)(+77.08)(+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. 
(from Hoovers)

CMGI has a very volatile week, even for an Internet stock.
CMGI had a range last week from $220 to $330 - whew, not
for the fainted hearted.  We continue to see large runs in
the net stocks, but with a following large loss.  Target 
shoot to get a fill and then don't get to greedy.  With the
large swings, premiums are at very high levels.  Even though
CMGI lost a small amount last week, many of the options 
stayed around even or went up.  This is because of the 
increase in volatility.  CMGI is a blue chip net fund, and 
as earnings continue to come out from different net companies,
we see CMGI continuing to go up.  

CMGI does have a split coming up in May.  Though we don't feel
this has much bearing for the coming week, we mistakenly spoke
of CMGI as a stock split candidate in last weekend's addition.

BUY CALL MAY-260 GCB-EL OI=247 at $36.63 SL=29.00
BUY CALL MAY-270*GCB-EN OI=741 at $32.50 SL=24.00
BUY CALL JUN-260 GCB-FL OI=144 at $44.38 SL=35.00
BUY CALL JUN-270 GCB-FN OI=324 at $40.38 SL=31.00

Picked on Mar.23rd at $164.00  PE = 1242
Change since picked    +96.88  52 week low =$ 13.52
Analysts Ratings    2-6-1-0-0  52 week high=$330.00
Last Earnings 03/99  est -.23  actual .28 surprise +222% 
Next Earnings 06-12  est -.20  versus .00
Average daily volume = 3.83 mln.
Chart = http://quote.yahoo.com/q?s=CMGI&d=3m

***********************
PC Hardware/electronics
***********************

DELL - Dell Computer $38.25 (-5.31)(+2.37)(P3W -1.00)

The one, the only, the amazing. . . Dell!  Dell is the 
direct sales model leader and pioneer of the on-line retail 
business.  They sell PC's notebooks, servers and work 
stations built to order direct from their factories 
worldwide.  Eager buyers pony-up 14 million e-$$$ daily for 
their products.  Total annual sales for the trailing 12 
months were $18.2 bln., excluding their recent foray into 
direct selling of other manufacturers software and support 
products from their gigabuys.com web site.  Despite their 
recent fall from grace, they are growing at an annual rate 
of 38% with margins that are the envy of the industry.  
Return on equity is a whopping 93% and growing.

Y'all ready for this?  Dell is back by popular demand 
(certainly not for its recent performance, despite an 
exemplary sales model).  Recent stock performance aside, 
Dell will report earnings in about 5 weeks on May 18 
(company confirmed but subject to change).  Dell will be 
presenting its case and outlook at the Hambricht and Quist 
conference this week, which could put life in the stock (if 
Dell continues to pound the table that it is executing 
well) as fund managers realize their recent public flogging 
of Dell may be a bit overdone.  Dell is still a great 
company by any stretch of the imagination, but is hobbled 
by industry-wide worries about the future.  Technically, 
Dell isn't looking so hot, but has near-term support in the 
$38 range, and super strong support at $36 (though 
intraday, it could go lower).  In a DOW sell-off, which is 
bound to happen after its huge 5-day record-setting spree, 
Dell will react in sympathy.  This is the time to enter the 
play on a run to earnings. Target shooting could yield the 
best results.  Wait patiently; no need to jump on this 
right away.  Wait for Dell to come to us.  Confirm market 
direction before playing.

Despite Dell's huge float of 2 billion (with a "b") shares, 
we think Dell will easily get to $40 before earnings.  
Since they will be the last of the biggies to report, 
investors hope that Dell will carry the torch and light the 
way out of the industry's murkiness and despair, as long as 
the story remains good.  Alfred Goldman, chief market 
strategist at A.G. Edwards said in a Nightly Business 
Report interview that market leaders like Dell may pull 
back a little more, they represent great value and he'd be 
a buyer right now.

-target shoot-you have time...
BUY CALL MAY-35*  DLQ-EG OI=16052 at $5.50 SL=3.75
BUY CALL MAY-37.5 DLQ-EU OI=10034 at $4.00 SL=2.50
BUY CALL MAY-40   DLQ-EH OI=33014 at $2.88 SL=1.50
BUY CALL AUG-37.5 DLQ-HU OI= 6418 at $7.13 SL=5.25
BUY CALL AUG-40   DLQ-HH OI=11472 at $6.00 SL=4.25

Picked on April 18 at  $38.25    PE = 77
Change since picked     +0.00    52 week low =$16.56
Analysts Ratings 11-12-11-0-0    52 week high=$55.00
Last earnings   02/99 est .16    actual .16
Next earnings   05-17 est .16    versus .11
Average Daily Volume = 44.8 mln.
Chart = http://quote.yahoo.com/q?s=DELL&d=3m

**************
COMMUNICATIONS
**************

LVLT - Level3 Communications, Inc $81.69 (-3.06)(+12.50)

Level3 Communications is a telecommunications and information 
service company that is building an international fiber-optic 
network.  The technology is based on internet protocol.  They 
provide local, long-distance, and internet service over leased 
networks in 15 cities in the US and 2 in Europe.  

LVLT was a blockbuster at the beginning of the week gaining 
over 8 points. And on Tuesday, it set a new 52-week high at 
$100.13 during intraday trading.  Volume was fairly strong 
the rest of the week, but LVLT suffered along with others 
in the tech sector.  Thursday, the stock rebounded and 
advanced +2.38 by the close only to give it back on Friday.  
Keep in mind, Level3 will report earnings this Friday, 
April 23rd, before the bell and have a conference call at 
11:00 EST.  It is risky to hold over an earnings report and 
we never recommend it - not even in this case where LVLT has 
been in a consistent uptrend for months!  

This week, Britain's Cable & Wireless announced they will 
invest $670 mln to build a vast internet network in the US 
using 15,000 route miles of fiber-optic cable purchased from 
Level3 Communications.  Also in the news, Metromedia Fiber 
Network will lease a local loop infrastructure in New York 
City and Washington DC to Level3.  This will provide the 
company with access to high-speed, high-bandwidth capabilities 
in lucrative territory.

BUY CALL MAY-80*QHN-EP OI= 373 at $ 8.75 SL=5.25 
BUY CALL MAY-85 QHN-EQ OI= 736 at $ 6.63 SL=5.00
BUY CALL MAY-90 QHN-ER OI=1253 at $ 4.63 SL=2.75 RISKIER
BUY CALL JUN-90 QHN-FR OI= 825 at $ 6.63 SL=5.00

Picked on April 6th at  $81.19     PE = 29
Change since picked      -0.50     52 week low =$ 22.37
Analysts Ratings     1-4-0-0-0     52 week high=$100.13
Last earnings 12/98 est= -.28   actual= -.11   surprise= 60.71%
Next earnings 04-23 est= -.44   versus= -.02
Average daily volume = 1.47 mln
Chart = http://quote.com/q?s=LVLT&d=3m

*************

MFNX - Metromedia Fiber Netwk. $66.75 (-0.63)(P4W +20.88)

You want bandwidth?  We got your bandwidth right here! How 
about 380,000-miles of dedicated fiber-optic network?  We 
got you covered in New York City metro area (including 
parts of Jersey), Chicago, Philly and Washington, DC too.  
Our lease arrangements with communications carriers, 
including local-exchange carriers; long-distance, paging, 
cellular, PCS, and cable companies let us save our Internet 
service providers, and corporate and government customers 
lots of money when they access our network.  We're 
expanding our US-to-UK services through a joint venture 
with Racal Telecom.  Our chairman and CEO Stephen Garofalo 
owns about 30% of the stock, so you know we aren't going 
anywhere.  Meter's runnin' buddy, what'll it be?

MFNX announced a 2:1 split last week, about a month sooner 
than we expected, which helped MFNX keep its head above 
water as the NASDAQ market shed 143 points (a 715 point DOW 
equivalent).  For those of you quick on the trigger in 
Tuesday's trading, MFNX's rise to $84.50 intraday on 
Wednesday would have produced spectacular gains.  
Hopefully, you kept most of that by using stop orders.  
Technically, MFNX is neutral to slightly positive with 
strong support at $63 (target shooting, anyone?), where 
from which it bounced nicely during Wednesday's mass rush 
for the exits.  MFNX should report earnings on May 17 per 
First Call, but MFNX hasn't set a date yet and won't until 
after May 1.  We'll keep you posted.  We suspect May 18, 
since that's the effective date of the split.  Trading 
about 700 K shares daily, any volume gooses the price since 
there are only 17 mln. shares in float.  Some day this 
week, the DOW is most likely to blow off steam following 
its spectacular 5-day, new-record-setting rise.  NASDAQ 
will have sympathy selling pressure, which could give us a 
nice entry.  Wait for the play to come to you.  Confirm 
market direction before entering.

MFNX announced last week that it will lease existing 
capacity to Level 3, another CLEC, in the New York and 
Washington, D.C. metro areas.  The deal is valued at $10 
mln., but no other terms were disclosed.

BUY CALL MAY-60 QFN-EL OI=1392 at $12.00 SL= 9.50
BUY CALL MAY-65*QFN-EM OI= 469 at $ 9.63 SL= 7.25
BUY CALL MAY-70 QFN-EN OI= 504 at $ 7.25 SL= 5.50
BUY CALL AUG-70 QFN-HN OI= 158 at $13.88 SL=11.25

Picked on April 11 at $67.38          PE = 6712 (really!)
Change since picked    -0.63          52 week low =$ 6.38
Analysts Ratings   3-1-0-0-0          52 week high=$84.50
Last earnings 02/99 est -.01 actual  .00
Next earnings 05-17 est -.17 versus -.05
Average Daily Volume = 663 K
Chart = http://quote.yahoo.com/q?s=MFNX&d=3m

*************
OIL Sector 
*************

UCL - Unocal Corporation $40.88 (+4.56)

Unocal used to be a gas retailer under the "76" logo.  Now, 
it has moved on to become the biggest independent oil 
exploration and production company in the United States.  The 
company develops crude oil and natural gas focused mainly in 
the Gulf of Mexico and Asia.  Unocal is also one of the world's 
leading producers of geothermal energy.

With its earnings right around the corner on April 27th(First 
Call), we are expecting decent numbers from companies involved 
with oil.  Most of the sector has made an incredible turn 
around in the past few months and we feel their reversal to 
the upside could continue well into their earnings season.  
Watch for UCL to head higher in the next week.  Keep in mind 
though, we never recommend holding after the actual announcement.  
Even though a company can turn out great numbers, if they 
aren't "high enough," the company can be hit with a lot of 
profit taking.  

News: Back on April 12th, Unocal announced a "very significant" 
oil and gas discovery found in the Gulf of Mexico.  The find 
could supply anywhere from "400-800 million barrels of oil 
equivalent gross resource." (-CBS Marketwatch)  Immediately, 
Salomon Smith Barney raised their target price to $43 for UCL 
and reiterated their "outperform" rating based on the high 
probability of future discoveries by the company.  However, 
this past Friday NB Montgomery downgraded the company to a 
"hold" from a "buy."

BUY CALL MAY-35 UCL-EG OI= 56 at $6.63 SL=4.75 vol=1750 on Fri.
BUY CALL MAY-40*UCL-EH OI=116 at $2.50 SL=1.25
BUY CALL JUL-35 UCL-GG OI=885 at $7.13 SL=5.00 vol=1707 on Fri.
BUY CALL JUL-40 UCL-GH OI=169 at $3.50 SL=1.75  

Picked on April 18th at $40.88      PE = 77
Change since picked     +$0.00      52 week low =$27.50
Analysts Ratings    7-8-12-0-0      52 week high=$42.13
Last earnings 01/99 est 0.57   actual 0.11 
Next earnings 04-27 est 0.02   versus 0.30
Average Daily Volume = 944.5 K
Chart = http://quote.yahoo.com/q?s=UCL&d=3m

****

MOB - Mobil Corporation $101.63 (+7.63)

Mobil is ranked as the #2 oil company in the United States 
and #4 in the world.  The company has operations in more than 
140 countries and exploration and production projects in 
approximately 25.  MOB is also involved in the chemical 
business focused on the production of petrochemicals, wood and 
polymer building materials plastics, and other products.   
Mobil will be bought by Exxon in a pending $73.7 billion linkup 
which will create Exxon Mobil, the world's biggest oil company.

MOB was one of the biggest movers in the oil sector this past 
week.  It added a total of +$7.63 and even set a new all time 
high at the price of $101.88 in intraday trading on Friday.  
Although the broader market has had somewhat of a rough week, 
the oils have held strong.  We feel that MOB can continue its 
run up until it announces its earnings on Friday April 23d 
(First Call).  This is really only a one week play.  Wait for 
an entry point on Monday or Tuesday and then consider closing 
those positions on Thursday before the earnings are released 
on Friday.  Even for strong companies, the risks associated 
with holding over an earnings announcement are extremely high.  

News:  Last month's agreement among oil-producing nations to 
cut back on production helped spark a rally in crude oil prices 
but it may have been too late to substantially affect first 
quarter earnings for the oil industry.  However, Mob is one of 
the few oil companies less exposed to the those prices.  The 
company is projected to announce around 0.55 a share vs 0.88 
the year before.  
 
BUY CALL MAY- 95*MOB-ES OI=1646 at $ 8.00 SL=6.25 lower premium
BUY CALL MAY-100 MOB-ET OI= 484 at $ 4.38 SL=2.75
BUY CALL AUG- 95 MOB-HS OI=1088 at $10.88 SL=8.75
BUY CALL AUG-100 MOB-HT OI= 502 at $ 7.50 SL=5.75
(100s are highest strikes)
 
Picked on April 18th at $101.63   PE = 49
Change since picked      +$0.00   52 week low =$ 62.44
Analysts Ratings     6-11-8-0-0   52 week high=$101.88
Last earnings    01/99 est 0.86   actual 0.21 
Next earnings    04-23 est 0.55   versus 0.88
Average Daily Volume = 1.79 mln
Chart = http://quote.yahoo.com/q?s=MOB&d=3m

*************
Retail  
*************

AVP - Avon Products, Inc. $56.19 (+7.00)

"Avon calling" -- calling for a $400 million dollar makeover. 
The world's largest direct seller of cosmetics and beauty-
related items is primping to build a global name and entice 
younger customers (while retaining its core market of middle-
aged buyers). The company's products include cosmetics (Avon 
Color), fragrances (Josie, Natori), toiletries (Skin-So-Soft), 
and jewelry, and Avon sells a wide variety of other products, 
from apparel and home furnishings to Barbie dolls. Direct 
selling remains the firm's modus operandi, but today more 
than half of Avon's sales are transacted in the workplace 
rather than at customers' homes. Avon is available in about 
135 countries. (from Hoovers)

AVP saw a nice run up this last week after announcing on
the 13th that earnings will come in higher than analysts
expectations.  This has given the stock some energy.  
Earnings are being announced on Thursday the 22nd of April.
Because we don't recommend holding over earnings, we will
want to play this one as a 2-3 day play.  Watch for a possible
pullback on Monday and then we should see a nice bump into
the announcement. 

AVP announced this last week that they are also pleased 
with the resolution to allow direct selling to China.  AVP
has been in China since 1990 and sees the country as a
great growth opportunity.  AVP's CEO says he feels 
confident that AVP can keep on pace for 16-18% growth.

-caution: options are light on volume.
BUY CALL MAY-50 AVP-EJ OI=213 at $7.38 SL=5.25 ITM $6.19 
BUY CALL MAY-55*AVP-EK OI= 43 at $4.00 SL=2.50 ITM $1.19 
BUY CALL JUL-55 AVP-GK OI= 59 at $6.13 SL=4.25 ITM $1.19

Picked on Apr.18th at $56.19   PE = 33
Change since picked    +0.00   52 week low =$25.00
Analysts Ratings   5-7-1-0-0   52 week high=$56.25
Last earnings 02/99 est= .55   actual= .56
Next earnings 04-22 est= .25   versus= .20
Average daily volume = 1.09 mln
Chart = http://quote.yahoo.com/q?s=AVP&d=3m

*****

AEOSD - American Eagle Outfitters $81.13 (+1.13)(+6.62)(+4.19)

American Eagle Outfitters is a casual apparel retailer for 
men and women.  All of its products bear its private-label 
brand name.  The company operates 350 mall stores in 39 
states primarily east of the Rockies.

This stock's performance is tied to its relative volume.  Monday 
AEOSD shot up +7.75 (9.5%) propelled by heavy trading. It also 
set a new 52-week high when it peaked at $88.13.  But the rest 
of the week, investors were shopping elsewhere and this stock 
was put on ice.  We expect some more pre-split excitement to 
be generated soon.  The 2:1 stock split is in about 2 weeks on 
May 3rd.  So look for a bounce, on strong volume, before 
initiating a new play.  

On April 8th, this stock symbol was changed from AEOS to AEOSD.  
Please make note of this change and verify the option symbols 
with your broker before opening a new position.

BUY CALL MAY-75 AQU-EO OI=1296 at $ 8.75 SL= 6.75
BUY CALL MAY-80*AQU-EP OI= 505 at $ 6.38 SL= 4.75
BUY CALL AUG-80 AQU-HP OI= 451 at $11.75 SL= 9.25

Picked on April 2nd at  $73.38   PE = 31
Change since picked      +7.75   52 week low =$27.37
Analysts Ratings     4-4-0-0-0   52 week high=$88.13
Last earnings on 1/99 est= .95   actual= 1.03   surprise= 8.42%
Next earnings on 5-31 est= .32   versus= .24
Average daily volume = 352.3K
Chart = http://quote.com/q?s=aeosd&d=3m

*****

DCX - DaimlerChrysler AG $96.94 (+2.38)(+7.00)

Even though this automobile manufacturer was created only a 
year ago with the $37 billion acquisition of Chrysler by 
Germany's Daimler-Benz, DCX is already ranked #3 in sales 
and #5 in number of cars sold.  The company even has a 
freightliner unit that is the #1 maker of heavy trucks in 
the United States.   Mercedes-Benz, Plymouth, Jeep, and Dodge 
are all part of DaimlerChrysler's line of products. 

DCX dipped on the news that it was being investigated by the 
European Commission under the pretense of possible price 
fixing between 1985-1996 and for breaking antitrust rules.  
The slight setback actually provided us with an entry point. 
DCX regained +$1.19 on Friday.  We feel that the upward move 
could continue as part of an earnings run.  The company is 
expected to report their numbers on April 28th as reported by 
AP Online.  Industry-wide sales have been at record breaking 
levels.  DCX even announced that their worldwide sales of 
Mercedes-Benz vehicles increased by 17% in the first quarter.  

News:  On Thursday, DCX said they will fight the European 
Commission's accusations.  Elsewhere, DCX will soon be focusing 
on China with a gradual approach to the region.  The company 
hopes to build a facility in the Beijing area. 

BUY CALL MAY- 95*DCX-ES OI= 521 at $5.25 SL=3.75 ITM $2.94
BUY CALL MAY-100 DCX-ET OI=1984 at $2.50 SL=1.25
BUY CALL JUL- 95 DCX-GS OI= 521 at $7.00 SL=5.25
BUY CALL JUL-100 DCX-GT OI= 685 at $4.88 SL=3.25

Picked on April 13th at $98.63      PE = 12
Change since picked    -$ 1.69      52 week low =$ 74.50
Analysts Ratings     0-4-5-0-0      52 week high=$108.63
Last earnings N/A  est -      actual - 
Next earnings 4-28 est -      versus -
Average Daily Volume = 951.0 K
Chart = http://quote.yahoo.com/q?s=DCX&d=3m

*****

F - Ford Motor Company $64.88 (+4.32)

Ford Motor Company is the world's largest truck maker and 
the #2 manufacturer of cars and trucks combined (behind 
General Motors).  It makes vehicles under the Aston Martin, 
Ford, Jaguar, Lincoln, Mercury, and Volvo brands.  Two of 
its biggest successes are the Ford Taurus and the F-Series 
pickup trucks.  The company also has stakes in foreign-based
automakers, including an interest giving it effective control 
of Japanese automaker Mazda.  Its Ford Motor Credit subsidiary 
is the US's #1 auto financer, and Ford also owns 81% of Hertz, 
the #1 car rental firm in the US.  Ford's 1999 purchase of 
Volvo made it Europe's #2 carmaker, trailing VW.  The Ford 
family owns about 34% of the company's voting stock. 
(from Hoovers)

Ford isn't what you would consider your high growth stock,
but it just announced earnings and they were up over 20% from
the previous years quarter.  Ford says sells in North America
were very strong.  Ford has been on a very nice up trend since
late March.  We feel that Ford will benefit from volatility of
the market.  When people get scared of big swings in the market,
they flee to more stable stocks.  Ford fits this category.  

Ford had a big day on Friday, so make sure there is no profit
taking before jumping in.  Options are very inexpensive.  
There is less than a dollar of time premium in the May 60.

BUY CALL MAY-60*F-EL 0I=2676 at $5.75 SL=4.00 ITM $4.88
BUY CALL MAY-65 F-EM OI=2360 at $2.44 SL=1.25
BUY CALL JUN-60 F-FL OI=3147 at $6.38 SL=4.50 ITM $4.88 
BUY CALL JUN-65 F-FM OI=2337 at $3.63 SL=1.75

Picked on Apr.18th at $64.88   PE = 12
Change since picked    +0.00   52 week low =$38.81
Analysts Ratings   3-6-6-1-2   52 week high=$66.50
Last Earnings 04/99 est 1.39   actual 1.46 
Next Earnings 07-12 est 1.87   versus 1.91
Average daily volume = 3.83 mln.
Chart = http://quote.yahoo.com/q?s=F&d=3m

*****************************

PLAYS CONTINUED IN SECTION FOUR.

*****************************
SEE DISCLAIMER IN SECTION ONE
*****************************


The Option Investor Newsletter             4-18-99
Sunday                4  of  6

*****************
PUTS, PUTS, PUTS
*****************
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 
****************

AET - Aetna $76.19 (-2.44)

Aetna is traditionally known as one of the leading 
providers of insurance in the U.S.  It has also diversified 
to become one of the largest financial services, health 
insurance, and managed-care providers.  Aetna's products 
include retirement services, variable life annuities, long-
term care insurance, and pension administration just to 
name a few.  These products and services are offered in 
countries all over the world.

Aetna dropped again Friday as the downtrend continues.  The 
stock is still trading in a weak pattern with sudden 
intraday drops, followed by a brief rally.  The lack of 
buying interest has us thinking that Friday's short-term 
low of 75 1/2 will come under fire again when trading 
resumes on Monday.  Apparently others feel the same as the 
put contracts have been especially active.  This sudden 
shift from insurance and health care is weighing on AET as 
it is firmly entrenched in both industries.  Don't be 
surprised to see another major health care provider 
initiate a new down leg for this group with bad earnings or 
an earnings warning.  Its becoming more and more frequent 
lately. 

BUY PUT MAY 75*AET-QO OI=155 at $3.25 SL=1.63
BUY PUT MAY 80 AET-QP OI=  7 at $6.25 SL=4.25 vol=137 on Fri.

Average Daily Volume = 722K

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

******

SEPR - Sepracor, Inc $94.00 (-23.38)

Sepracor researches, develops, and commercializes improved 
compounds of existing pharmaceuticals and biopharmaceuticals.  
These products are new and patented formulas.  They can 
provide the consumer with fewer side effects, improved 
safety, new uses, and even refined dosages.  For instance, 
Sepracor made Allegra as an alternative to Seldane, which 
the FDA had pulled its approval of in 1997.

Before the bell on Friday, Sepracor's earnings came in well 
below estimates, as expected.  They reported 1Q share loss 
of -.93 versus -.43 for the same quarter in 1998.  
MSN.MoneyCentral reported earlier this month that analysts 
don't anticipate the company to show any profits for a few 
years.  SEPR has been in a downtrend since the beginning of 
April, but really deteriorated on Tuesday when it broke 
through support at $111-112 and lost -9.25 points.  
Overall, the stock has dropped a little more than $23 in a 
week.  Friday, SEPR traded in a wide 8+ range dipping as low 
as $90.13 to finally close up a fraction. This may be a good 
entry point.  Technically, this stock could spiral further 
down. The MACD is still showing a down tick and it is 
positioned well below the bullish 10 dma at about $110. But 
remember, SEPR has had big downward spikes in a short period, 
so expect possible bargain hunters to step in for a deal or 
two.  Confirm stock direction and as always, use stops for 
protection.

BUY PUT MAY-90*ERQ-QS OI=38 at $7.38 SL=5.75 
BUY PUT MAY-95 ERQ-QT OI=29 at $9.88 SL=7.50

Chart = http://quote.yahoo.com/Q?s=sepr&d=3m

*****

BGEN - Biogen, Inc. $105.50 (-8.94)(+.94)

AVONEX calling! Not a peddler of cosmetics, Biogen researches, 
develops, and markets biopharmaceuticals to treat a variety 
of ailments; about 55% of total sales are from AVONEX, a 
drug used to treat relapsing multiple sclerosis.  The company 
is developing a number of drugs to treat inflammation, 
pulmonary diseases, kidney diseases and disorders, and central
nervous system disorders.  Biogen also makes money by licensing 
drugs it has developed to other companies; such products include 
alpha interferon and a hepatitis B vaccine.  Biogen has research 
agreements with such pharmaceutical firms as Creative 
BioMolecules, CV Therapeutics, and Merck. (from Hoovers)

BGEN tried to overcome a very negative week by announcing a
2-1 split on Friday.  This initially worked as BGEN reached
an intra-day high of $111.50 before closing near its low of
the day.  BGEN is at a key point.  It is sitting right on its
50-dma, which has acted as support in the past.  If BGEN 
breaks down on strong volume, it could be in for an even 
bigger fall.

BUY PUT MAY-105*BGQ-QA OI=222 at $5.63 SL=3.75
BUY PUT MAY-110 BGQ-QB OI=176 at $8.50 SL=6.50

Average daily volume = 1.27 mln
Chart = http://quote.yahoo.com/q?s=BGEN&d=3m

********

RMBS - Rambus Inc. $65.75 (-6.19)(+5.94)

Rambus Inc. develops and licenses high-performance chip-to-chip
interface technology that enables semiconductor memory devices 
to keep pace with faster generations of processors and 
controllers.  Rambus deals mainly with the multimedia, 
networking equipment, and digital TV markets.  Rambus earns 
royalties from semiconductor makers, including NEC, Samsung, 
and Intel when they use Rambus-based products.

When Rambus announced its earnings this past Thursday, the 
company bumped up +$3.44.  We felt this was only a temporary 
situation since the company projected that the rest of its 
1999 figures would be no better than flat.  As we expected, 
RMBS resumed its slide into murky waters by slithering down 
-$1.19 on Friday.  Hambricht & Quist downgraded the company 
to a market perform from their previous buy recommendation.  
We feel this will aid our put positions.  However, make sure
to make use of those trailing stop losses. 

No new news.  

BUY PUT MAY-70 BNQ-QN OI=1386 at $8.63 SL=6.50
BUY PUT MAY-65*BNQ-QM OI= 867 at $5.88 SL=4.25

Average Daily Volume = 1.05 mln 
Chart = http://quote.yahoo.com/q?s=RMBS&d=3m

********

DLJ - Donaldson, Lufkin & Jenrette, Inc. $79.38 (-6.63)

DLJ is one of the top investment firms in the United States.  
It is primarily involved with investment and merchant banking, 
providing funding for companies through direct investment, and 
managing/underwriting securities.  DLJdirect is considered one 
of the top online brokerages.  DLJ is 70% owned by The 
Equitable Companies.  

Like most of the brokerage sector, DLJ made an incredible 
earnings run.  It added over +$50 in April's trading alone.  
Even though DLJ crushed analysts' expectations of 0.70 cents 
a share by reporting and amazing 0.84 cents a share, profit 
takers were already well on their way to the bank.  As the saying 
goes- the bigger they are, the harder they fall.  When a stock
makes a huge run-up, the downside will come.  The company is on 
its way back to Earth and we feel this is a prime put candidate. 

No new news.  

BUY PUT MAY-80 DLJ-QP OI= 84 at $8.63 SL=6.50
BUY PUT MAY-75*DLJ-QO OI=579 at $6.25 SL=4.75  

Average Daily Volume = 517.9 K
Chart = http://quote.yahoo.com/q?s=DLJ&d=3m

*****

GTW - Gateway, Inc. $64.19 (-8.56)

Gateway is ranked #2 in the US as a direct marketer of PC's.  
The company takes orders for their computers by phone or on 
their Web site which eliminates resellers and cuts markup 
costs.  The company's products include desktop and portable 
PCs, PCTVs, and NetPCs as well as several other computer 
related products.

Gateway's graph looks great if you like puts.  The company has
steadily dropped below every major moving average.  Weakness in 
the PC sector is showing its ugly face in the graphs of computer 
related companies like GTW.  We don't see their earnings 
reversing their present course.  The company will announce on 
Thursday April 22nd (First Call).  Although we never recommend 
holding over an earnings announcement, this may be an exception 
to the rule.  We see weakened numbers adding to the fall.   

News:  CPQ warned it Q1 profits would fall short of Wall Street
expectations.  This is where the "Cockroach Theory" comes into 
play.  Where there is one, there are usually others.  We feel 
that GTW's profits could also be weakened.  Back on Monday, 
Salomon SB downgraded GTW from a buy to a neutral.   

BUY PUT MAY-65*GTW-QM OI= 353 at $6.00 SL=4.25
BUY PUT MAY-60 GTW-QL OI= 566 at $3.50 SL=1.75

Average Daily Volume = 2.08 mln 
Chart = http://quote.yahoo.com/q?s=GTW&d=3m

*****

SCH - Charles Schwab $114.81 (-9.19)

Charles Schwab is a holding company with subsidiaries that 
provide financial services which include discount brokerage, 
trade execution, investment, advisory services, and 
administrative 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.8th, it also entered the Canadian 
market through an acquisition. 

SCH made an absolutely incredible earnings run.  The brokerage 
sector had been hot and the earnings expectations were extremely 
high.  Even though SCH's numbers weren't released until Thursday, 
the sell off actually began after SCH set an all time high of 
$155 this past Wednesday.  By the time SCH actually announced 
its numbers that beat the street by a penny, the stock was 
already being hit from major profit taking.  We feel its present 
downhill course will continue well into next week.  Make sure to 
follow your positions with trailing stop losses so your are 
prepared in case the profit taking subsides.

No new news. 

BUY PUT MAY-115 SCH-QC OI=417 at $11.00 SL=8.75
BUY PUT MAY-110*SCH-QB OI=484 at $ 8.88 SL=6.75  
 
Average Daily Volume = 2.08 mln
Chart = http://quote.yahoo.com/q?s=SCH&d=3m

*********

GDT - Guidant, Inc. $52.63 (-12.62)

Medical device maker Guidant has a healthy heart.  The company 
is a worldwide manufacturer of cardiovascular therapeutic 
devices and related products.  Its cardioverter defibrillators 
and pacemakers (50% of sales) detect and treat abnormally fast, 
slow, and irregular heartbeats.  The company's vascular products 
(45% of sales) help open blocked arteries. GDT also develops 
minimally invasive surgical devices to reduce procedure times 
and improve patient recovery.  (from Hoovers)

GDT announced record earnings on the 15th last week and then
proceeded to drop for two straight days.  Though GDT had
strong earnings, the street sees GDT as being overvalued.  The
stock has a PE of 39, compared to the industry average of 24.
GDT broke strongly through its 50-dma and is looking to fall
to its 200-dma at around $46.  Watch for a bounce after two
large drops.  A bounce down off the $55.50 level would be
buyable.

BUY PUT MAY-55 GDT-QK OI=153 at $5.38 SL=3.50
BUY PUT MAY-60*GDT-QL OI=215 at $8.88 SL=6.50 vol=2031 on Fri.
plus premium is only $1.50
-55s are lowest strike available-

Average daily volume = 1.28 mln
Chart = http://quote.yahoo.com/q?s=GDT&d=3m

********

ELNK - Earthlink Network, Inc. $68.75 (-20.25)

Earthlink Network is one of the world's largest ISPs -- with 
about one million subscribers throughout the US and Canada, 
the company vies with MindSpring for the #2 spot behind 
industry leader American Online.  ELNK's Network TotalAccess 
software package works with third-party browsers through 
telephone or cable modems, ISDN lines, or frame relay 
connections.  Services include e-mail, business and personal 
Web sites, ISDN services, and an Internet shopping mall and 
gaming service. ELNK provides Internet access from 1,400 
points through EarthLink Sprint Internet. (from Hoovers)

ELNK has been a prime example of why we don't hold over
an earnings announcement.  The company announced earnings
on the 14th, which were up substantially.  Unfortunately for
those holding the stock, it has fallen hard the last 3 days.
ELNK is sitting precariously on its 50-dma and will fall
even further if it breaks this support.  Watch for a bounce
on Monday before initiating new plays. 

BUY PUT MAY-65 QKL-QM OI=160 at $ 7.63 SL=5.75
BUY PUT MAY-70*QKL-QN OI=130 at $10.38 SL=7.75

Average daily volume = 1.03 mln
Chart = http://quote.yahoo.com/q?s=ELNK&d=3m

*******

EGRP - E*Trade Group $92.56 (+2.43)(+29.25)(P5W +16.81)

EGRP is the #3 online brokerage firm with almost 550,000
accounts.  EGRP also offers market data, cash and portfolio
management services, and options trading.  About 30% of 
sales come from sales of advertising on its Web site, 
international ventures, subscriptions, and other services.  
Through joint ventures the company also operates in such 
countries as Canada, France, Germany, Japan, the 
Netherlands, and Poland.  SOFTBANK, its joint venture 
partner in E*TRADE Japan, owns 28% of the company. 

High-risk player?  Read on.  OK fellow traders, what 
ultimately happens to a company's stock price when it 
defies gravity, reports earnings, and the tech market is 
subject to a mega-sized profit taking?  Right!  It goes 
down!  That's the basis for this play.  EGRP has been to 
the moon and is now on its way back, about to heat up from 
re-entry.  Earnings will be reported Tuesday, April 20, 
before the open.  We may see the beginnings of a sell-off 
tomorrow.  If Ameritrade reported 2 times the earnings 
estimated by the Street, and Schwab reported 110% earnings 
increase in earnings, and both still went down, we are 
comfortable predicting the same fate for EGRP.  Remember, 3 
weeks ago we saw $60 on the price-o-meter.  Despite falling 
back from its all-time high of $144.50, there is still 
plenty of profit to be wrung from this one.  Again, this is 
a high-risk play; use risk capital only.  Positive 
sentiment could fly out of left field for any reason.  
Confirm market direction before playing, and for gosh 
sakes, use stops.

!~HIGH RISK~!
BUY PUT MAY-95 QGZ-QS OI=153 at $17.63 SL=13.75
BUY PUT MAY-90*QGZ-QR OI=406 at $14.75 SL=11.50

Average Daily Volume = 6.9 mln.
Chart = http://quote.yahoo.com/q?s=EGRP&d=3m

*******

IBM - Intl. Bus. Machines $170.38 (-15.93)(+9.69)(+4.62)

Anybody not know what IBM does?  No?  Good.  Just in case, 
IBM is the granddaddy of the modern-day technology 
business.  They develop, make and sell new technology, 
solutions, products including mainframes and PC's, computer 
services, software and finance all of it.

This is a high-risk play, but one where we think the odds 
are pretty good.  IBM will report earnings Wednesday, April 
21 after the close.  Given the selling pressure in the 
industry, anticipation of earnings is the only thing 
keeping IBM from falling.  It's been unusually weak anyway.  
Remember what generally happens to companies that report 
earnings?  They drop after the news is out.  Frankly, we 
wouldn't be surprised to see IBM shed a few points in 
advance since investors are getting wise to the "sell the 
fact" mentality, especially if the DOW steps forth with a 
juicy profit-taking day.  Something to pay attention to if 
you base your strategy around the technicals: IBM has had 
tremendous support every time it hit $165.  Otherwise, the 
technical indicators are weak.  Earnings, expectancy of a 
DOW correction, industry pressure, and weak technicals (in 
that order) are the basis of the play.  Use risk capital 
only and confirm market direction before taking a position.

Lots of stuff in the news about IBM's recent joint ventures 
and alliances, but nothing that will affect this play.

!~HIGH RISK~!
BUY PUT MAY-175 IBM-QO OI=1826 at $9.50 SL=7.25
BUY PUT MAY-170*IBM-QN OI=1798 at $7.00 SL=5.25
BUY PUT MAY-165 IBM-QM OI= 868 at $5.00 SL=3.25

Average Daily Volume = 5.0 mln.
Chart = http://quote.yahoo.com/q?s=IBM&d=3m

*******

AMTD - Ameritrade $126.00 (+10.44)(+56.00)(+3.93)

AMTD is a retail discount brokerage with related financial 
services and another strong player (the sixth largest) in 
the on-line brokerage business.  82,000 new accounts were 
opened last quarter, bringing their total number of 
discount brokerage accounts to 428,000.

On the eighth day, God said, "Let there be gravity."  And 
so there was as it engulfed another defiant on-line 
brokerage stock gone ballistic.  AMTD traded as high as 
$188.38 last week but could not escape profit taking, post 
announcement sell-off and sector rotation, despite stellar, 
fantastic, incredible, blowout, etc. earnings of 2 times 
the street's prediction.  Think we've found a bottom yet?  
Don't bet on it.  The current sentiment hasn't ended, nor 
do we expect it to until the DOW blows off some steam, 
which we think will happen this week, following 5 record-
setting days in a row.  There is no support for this stock 
until it completes its stair-step descent back to $65.  
This is still an Internet play with buckets of risk.  
Confirm market direction before playing and take Dramamine 
to avoid motion sickness (not to be construed as medical 
advice; metaphor only).

In the news, net income reported last week was 14 cents per 
share, besting the Street consensus of 7 cents by 2 times.  
A compelling argument, but it was not enough to support 
AMTD's lofty 203% 2-week rise.  Kids, don't try this at 
home.  The jet stream at this altitude will carry you to a 
land of no comfort, far away.

*** Odd $$$ strikes not used due to lower volume.
!~HIGH RISK~!
BUY PUT MAY-130 TAZ-QF OI=146 at $24.88 SL=19.50
BUY PUT MAY-120*TAZ-QD OI=221 at $17.00 SL=13.25
BUY PUT MAY-110 TAZ-QB OI=139 at $14.00 SL=11.25

Average Daily Volume = 2.4 mln.
Chart = http://quote.yahoo.com/q?s=AMTD&d=3m

******

WCOM - MCI Worldcom $84.75 (-5.31)

MCI Worlcom is a leader in global telecommunications.  It 
provides local and long distance phone and Internet 
services, including voice and data communications.  The 
company was formed in 1998 as a combination between, you 
guessed it, MCI and Worldcom.  The combined entity now has 
operations in over 50 countries.  

The closing bell spared WCOM as it dropped yet again. The 
stock had four consecutive down days to end the week. And 
despite a final 15 minute rally in many issues, WCOM only 
managed to close an 1/8 off its day low.  With the close 
under $85, it marked the break of its support at the 50-
dma.  Earnings are expected to be announced this week on 
4/23 and First Call is expecting .34 cents.  With all the 
recent acquisitions, you have to wonder if it isn't tapping 
into the bottom line.  Today, in fact, they announced 
another with the purchase of CAI Wireless Systems. 

BUY PUT MAY 90 LDQ-QR OI=1921 at $7.88 SL=4.75
BUY PUT MAY 85*LDQ-QQ OI=3345 at $4.75 SL=2.50

Average Daily Volume = 9.7 mln

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

******

NSOL - Network Solutions $89.75 (-18.25)

Network Solutions is the company to call when your ready to 
get your Internet domain name registered on the web.  Its 
the world's largest Internet registration services company.  
It registers and maintains both business and individual  
domain names within the .com, .net, .org, and .edu top-
level domains.  Network Solutions also provides consulting 
for companies looking to improve online presence or 
Intranet networks.

NSOL's recent bumpy ride got hit even more bumps as 
investors bailed out of the Internets this week.  NSOL's 
stock has had more than a 40% haircut off of highs hit just 
three weeks ago.  The trigger was reports that NSOL will 
face much more stiff competition as their government 
contract to provide a database for domain names will be 
terminated.  This will cause competition from others firms 
that are claiming they will provide the service for a 
fraction of NSOL.  All this has brought about the short 
sellers and a lower stock price.  The volume was heavy 
again Friday and we should see more ahead but watch closely 
for company comments to send the shorts running for cover.

BUY PUT MAY 90 JNQ-QR OI=428 at $17.25 SL=10.00
BUY PUT MAY 85*JNQ-QQ OI=  0 at $13.88 SL= 7.50 Just 
Opened, Volume of 135 Friday

Average Daily Volume = 894 K

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

*******

COST - Costco Companies Inc. $81.69 (-8.19)

Costco owns and operates large wholesale stores throughout 
U.S., Korea, U.K., Taiwan and Canada.  They pioneered the 
concept of building giant warehouse stores that average 
over 129,000 square feet and selling goods at a discount to
other traditional retail stores.  Their member base can 
shop for a wide variety of popular, name-brand items 
including tires, electronics, bulk food, bakery items, 
clothes, medicines and many other fast-selling items.  
Their selected inventory and fast inventory turnover is the 
key to success.

Many of the high-flying, steep multiple stocks have taken a 
beating lately and COST is no exception.  At a P/E of 39, 
this stock is well above the industry average.  There has 
been little news from either the company or analysts 
recently as to why the recent sell off.  The stock has been 
unable to rally off their earnings report in March and news 
that 3 top executives, including the CFO and CEO, have been 
selling shares would lead us to believe we've seen a short-
term high. The stock broke through the 50-dma on Thursday 
and has a lot of air underneath due to the rapid ascent of 
the stock.

BUY PUT MAY 85 PRQ-QQ OI= 65 at $6.00 SL=3.25
BUY PUT MAY 80*PRQ-QP OI=200 at $3.63 SL=1.88

Average Daily Volume = 1.87 mln

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

********

CAH - Cardinal Health $67.06 (-.38)

Cardinal is a health care product and pharmaceutical 
company.  They distribute cost-effective supplies and 
services to drug stores, hospitals, care centers and 
supermarkets throughout the U.S.  This includes their own 
subsidiaries such as Medicine Shoppe International, Owen 
Healthcare, and R P Scherer.  In February, they completed a 
merger with Allegiance Corp that brought the combined 
entity to a market value of $21 billion.

CAH ran into a wall of resistance at its 200-dma moving 
average.  The stock went through a 25-point sell-off from 
highs reached in February and pierced every major moving 
average on its way.  We've seen a technical bounce which 
brought CAH right back to its 200-dma this week.  But it 
was to no avail as the stock hit resistance at $72 and now 
seems destined to retests its lows of last week near $60. 
Health care companies in general have had a rough going 
recently but trading in CAH has been especially brutal.  
Earnings this week on 4/21 should provide some insight into 
the selling.  

BUY PUT MAY 70*CAH-QN OI= 22 at $5.00 SL=2.50
BUY PUT MAY 65 CAH-QM OI=207 at $2.44 SL=1.25

Average Daily Volume = 796 K

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

*******

AMGN - Amgen $66.81 (-11.25)

Amgen is one of the elite companies in the biotechnology 
industry.  Amgen develops products to treat cancer, 
arthritis, blood disorders, Parkinson's, Alzheimer's, other 
infectious disease and many more. Its current drugs 
include: Neupogen (used for cancer and AIDS patients), 
Infergen (for treating hepatitis C), and Epogen (for the 
production of red blood cells).  It has several alliances 
with other key companies that help Amgen maintain its 
position as world's largest biotechnology company.

The momentum continues to be down for Amgen.  Today's close 
put the stock firmly below its 50-dma and marked its fourth 
straight day of selling on big volume.  The closing price 
was again right near the day low, which is an indication of 
more selling to come.  Even an upgrade from CS-First Boston 
couldn't rally the stock on Thursday.  These are all 
negative indications ahead of earnings which are set to be 
released on April 21.  First call is looking for .44 cents 
a share. 

BUY PUT MAY 70 AMQ-QN OI=460 at $5.62 SL=3.00
BUY PUT MAY 65*AMQ-QM OI=  3 at $3.25 SL=1.75 Fri volume=147

Average Daily Volume = 5.94 mln

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

********

ELN - Elan Corps Ads $60.00 (-16.81)

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.  

ELN got hammered the past 5 trading days despite the report 
on Wednesday by MarketScope that the stock was upgraded to 
"buy" from "accumulate". The descent has been steadfast and 
always on very strong volume.  ELN shed points everyday this 
week. Its losses total -16.81 with the biggest drop (-5) 
occurring on Friday when over 4 mln shares of the stock traded.  
Three important technical indicators, the MACD, MOM, and STO, 
are all showing down ticks and the stock is already 9 points 
below its 200 dma line.  The million-dollar question is how 
much farther will it go.  The only gauge may be ELN's 52 week 
low which is at $54.56.  There are two important news events 
to mention.  The 2:1 stock split that was expected to be 
approved at the Shareholder's Meeting on April 30th has been 
amended.  The General Meeting is now scheduled for May 14th 
and the record date for the proposed stock split is on 
May 27th.  Also, pushed ahead is the filing for their specialty 
painkiller, Ziconotide.  Elan admitted their new drug is 
still in the late research stages and will be delayed 
approximately 6 months.  

BUY PUT MAY-60 ELN-QL OI=200 at $5.13 SL=3.25
BUY PUT MAY-65*ELN-QM OI=746 at $8.00 SL=6.25 lower premium

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

*******

ATHM - At Home Corporation $144.94 (-27.69)

At Home provides high-speed internet access and other online 
services to consumers and businesses.  They use cable 
television infrastructure and leased digital communication 
lines to deliver data about 100 times faster than traditional 
telephone modems.  At Home has about 330,000 customers across 
US and Canada.  The company has access to 60 mln potential
customers in North America through already existing cable. 

Tuesday, ATHM reported earnings in line with analysts 
estimates at a loss of -.07 p/s but fell -7.13 amid 
investor's doubts of future growth.  Some analysts suggested 
the company may have trouble meeting new subscriber goals 
for the year. And also, the analysts are concerned that 
the stock's fast-rising price may have gotten too far ahead 
of itself in relation to growth prospects. For the rest of 
the week, the Nasdaq provided the perfect environment and 
the stock continued to crash. Wednesday, ATHM took a 
devastating fall and lost -22.94. Thursday and Friday it 
dropped another -14.12 points in heavy trading. The 
technicals are indicating further descent, yet internet 
volatility is very common.  Now, we know the spikes have 
been grand and it's tempting, but do not put caution to 
the wind! Consider the market and stock sentiment before 
beginning a new play.  In an aggressive play its especially 
important to know your tolerance for risk. And please, use 
stops to protect your profits.

BUY PUT MAY-140 AHQ-QX OI= 899 at $16.13 SL=12.75
BUY PUT MAY-145 AHQ-QY OI= 414 at $20.38 SL=16.00
BUY PUT MAY-150*AHQ-QZ OI=1389 at $21.50 SL=16.75

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

*******

VIA.B - Viacom, Inc $40.88 (-5.50)

Viacom is a very diversified entertainment and publishing 
company and is one of the world's leading media companies. 
Their operations are in 5 distinct business segments: Networks 
& Broadcasting, Entertainment, Video & Music/Theme Parks, 
Publishing, and Cable Television. Viacom owns cable superpower 
networks like MTV & Showtime, publishing giant Simon & Schuster,
Blockbuster Video, Paramount Pictures, and 17 television stations
 - and that's just touching the surface.

VIA.B sharp descent began on Tuesday amidst the Nasdaq turmoil.  
The stock broke through its long-time resistance of $42-43 on 
Thursday. Then confirmed its disposition by dropping -2.13 the 
next day on very strong volume - generally a very bearish 
signal. Other technicals are also supportive of the downtrend,
but we'd like to see it further corroborate and move closer to 
its 200 dma at $36-37.  The stock recently split 2:1 on 
March 31st and earnings are expected April 28th.  

The syndication industry itself is experiencing field-wide
consolidation and Viacom is a major player.  Recently, 
Viacom announced it is offering $9 p/s for the 20% of 
Spelling Entertainment (SP) it does not own.  If they are 
successful in their bid, Viacom could easily merge SP's 
Worldvision with Paramount Domestic Television.  

BUY PUT MAY-35.00 VMB-QG OI=704 at $0.38 SL=0.00
BUY PUT MAY-40.00*VMB-QH OI= 40 at $1.63 SL=0.75  Volume=2050

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




 ******************************
 SEE DISCLAIMER IN SECTION ONE
 ******************************




The Option Investor Newsletter            4-18-99
Sunday                5  of  6

***********************************************************
Combos      
***********************************************************
An Incredible Week For The Dow...

Friday, April 16

Blue-chip stocks completed an impressive week with the Dow closing
at another record high Friday but a sell-off in technology stocks
prevented a marketwide rally. The world's most-watched average
ended 31 points higher at 10,493 while the Nasdaq index fell 39
points to 2,482. In the broader market, advancing issues led
declines 20 to 10 on very heavy volume of one billion shares on
the NYSE.

Portfolio plays:

The market moved basically as expected, a small morning bounce
followed by a midday slump and more bargain hunting at the close.
Most of our positions were closed or adjusted fairly early while
the speculation (or potential) of a rally was still good. There
were no big surprises this month but there were issues that we
could have done better with (LU and TXN for example). DELL is
the only real heartache in the portfolio and that's because we
are entirely too attached to this stock to make good judgments.
We are very happy that INTU finally rebounded (although we took
a loss, some of our readers may eventually be successful) and
UAL really took off with a $5 gain today. We used the EMC slump
to buy back those MAY35C positions. (I hope the stock rebounds!)
We still have some calls to sell next week but most of our long
term plays have been rolled forward to May. The remaining plays
on MER, SEPR and SUNW will be executed when these stocks recover
from the recent sell-off. Our other long positions; BTC, GILD and
ITWO will be sold on any short-term rally (and the longer we wait,
the greater the potential for loss). Our final "play of the day"
was the credit butterfly on AAPL that we opened about 6 weeks ago.
The stock needed to finish near $35 for maximum profit and just
look where it closed...

Please send questions on spreads/combos to ray@OptionInvestor.com
******************************************************************
			- CREDIT SPREAD SUMMARY -
******************************************************************
Stock  Pick     Last     Position     Credit  Cost   G/L   Status

CTXS  $74.06   $31.84  APR47C/APR45C  $0.38  $0.00  $0.38  Closed
DELL  $46.81   $38.25  MAY40P/MAY42P  $0.81  $1.81 ($1.00)  Open
LU    $111.75  $56.75  APR62C/APR60C  $0.43  $0.75 ($0.31) Closed
MSFT  $171.19  $86.25  APR67P/APR70P  $0.25  $0.00  $0.25  Closed
NSOL  $288.00  $89.75  APR85P/APR90P  $0.75  $0.25  $0.50  Closed
PBI   $61.25   $63.63  APR70C/APR65C  $0.75  $0.00  $0.75  Closed
RMBS  $66.00   $65.75  APR85C/APR80C  $0.38  $0.00  $0.38  Closed
SUNW  $126.87  $55.00  APR55P/APR57P  $0.50  $0.25  $0.25  Closed
TXN   $91.25  $109.75  APR75P/APR80P  $0.50  $0.00  $0.50  Closed
UNPH  $106.93 $126.81  APR95P/APR90P  $0.75  $0.00  $0.75  Closed

* LU actually expired profitable but both SUNW and LU were closed
  prior to expiration to limit potential losses.
 
Credit spreads are profitable if both positions remain OTM until
expiration. The cost-to-close price can be used to compare the
initial opening credit to the current spread value.
******************************************************************
			- CALENDAR SPREAD SUMMARY -
******************************************************************
Stock Pick    Last      Position     Debit   Value    G/L   Status

BTC  $16.75  $15.81       MAY15C     $1.50   $1.25  ($0.25)  Open
CIEN $22.44  $20.25   JUL20C/MAY20C ($1.75)  $1.25   $3.00   Open
CPB  $41.43  $41.44   MAY42C/APR42C  $0.87   $2.00   $1.12  Closed
FDX  $98.12 $105.38   JUL100C/M100C  $2.00   $3.25   $1.25   Open
FFD  $10.81  $10.00       JUN10C     $0.56   $1.50   $0.93   Open
FLT  $43.06  $43.88   JUL45C/MAY45C  $0.50   $1.00   $1.50   Open
GILD $46.00  $40.75       MAY45C     $1.38   $1.75   $0.38   Open
HUM  $19.50  $12.31       MAY20C     $0.12   $0.00  ($0.12)  Open
ITWO $34.87  $25.50       MAY35C     $1.62   $1.00  ($0.62)  Open
KLAC $55.50  $53.25   JUN55C/MAY55C  $0.25   $1.50   $1.25   Open
NWAC $25.00  $30.25   JUN25C/MAY30C  $2.00   $3.75   $1.75   Open
OXHP $20.06  $17.84   MAY20C/APR20C ($1.06)  $0.56   $1.62  Closed
NOVL $18.19  $22.13   MAY17C/APR22C  $2.00   $4.87   $2.87  Closed
SKYT $26.38  $18.25   JUN25C/MAY22C ($1.88)  $1.50   $0.38   Open
UK   $48.06  $52.63   JUL50C/MAY50C  $0.87   $1.50   $0.62   Open

* OXHP was closed prior to expiration and a new position will be
  sold against the FFD (JUN-10) call next week.

LONG TERM POSITIONS:

Stock Pick    Last      Position      Debit   Value    G/L  Status

CD   $19.93  $18.25   LJAN20/MAY20C   $2.12   $2.50   $0.38  Open
DIS  $38.00  $33.44   LJAN40/MAY35C  ($0.50)  $1.25   $1.75  Open
EMC $124.63 $107.25      OCT130C     $11.25  $11.12  ($0.12) Open
HAL  $31.00  $41.38   LJAN30/MAY35C   $4.00   $6.25   $2.25  Open
HD   $58.43  $63.31   LJAN60/MAY65C   $4.50   $6.00   $1.50  Open
JNJ  $86.63  $93.13   LJAN85/MAY90C   $9.38   $9.00  ($0.38) Open
LEH  $57.93  $58.94   LJAN60/MAY60C   $3.00   $6.25   $3.25  Open
MER  $97.00  $87.13      LJAN100C    $12.75   $8.75  ($4.00) Open
MOT  $83.00  $79.88   LJAN85/MAY85C   $7.00   $7.25   $0.25  Open
PG  $100.50  $98.25   LJAN100/M100C   $6.50   $7.25   $0.75  Open
SEPR $99.63  $94.00      LJAN100C    $22.00  $19.50  ($2.50) Open
SGP  $53.88  $52.50   LJAN55/MAY55C   $2.87   $4.50   $1.62  Open
SUNW $94.50  $55.00      LJAN50C      $3.62  $10.87   $7.12  Open
UAL  $65.38  $83.00   LJAN65/MAY75C  $10.50  $13.75   $3.25  Open
WCOM $74.25  $84.75   LJAN75/MAY80C   $5.62  $10.75   $5.12  Open

* New call positions will be sold on EMC, MER, SEPR and SUNW next
  week.

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

AMAT  $64.38   $61.38   MAY55C/60C   $3.62   $3.00  ($0.62)  Open
BPA   $99.75  $108.81   APR90C/95C   $3.75   $4.75   $1.00  Closed
BR    $40.25   $42.63   APR37C/40C   $1.38   $2.00   $0.62  Closed
CDO   $22.75   $24.94   MAY17C/20C   $1.50   $1.75   $0.25   Open
CNCX  $95.00   $84.56   MAY65C/70C   $3.87   $3.12  ($0.75)  Open
COOL  $21.38   $16.13   APR17C/20C   $1.25   $1.50   $0.25   Open
DELL  $46.81   $38.25   MAY45C/47C   $1.00   $0.50  ($0.50)  Open
DRIV  $44.94   $40.63   MAY30C/35C   $4.00   $3.50   $0.50   Open
EGGS  $21.87   $15.19   APR17C/20C   $1.50   $1.50   $0.00  Closed
ESPI  $9.62    $13.88  JUN5C/JUN7C   $1.87   $2.12   $0.25   Open
FORE  $13.12   $24.81   APR10C/12C   $1.50   $2.25   $0.75  Closed
INTU $106.06   $95.56   MAY85C/95C   $7.75   $6.50  ($1.25) Closed
MER   $97.00   $87.13   MAY90C/95C   $3.12   $3.00   $0.12  Closed
MI    $16.50   $18.19   MAY15C/17C   $0.62   $1.38   $0.75   Open
NSOL $288.00   $89.75  APR100C/105C  $3.87   $4.38   $0.50  Closed
NTLI  $83.50   $77.25   APR75C/80C   $3.87   $4.25   $0.38  Closed
NXTL  $39.18   $38.00   MAY30C/35C   $3.62   $3.62   $0.00   Open
PRD   $21.82   $19.81   APR17C/20C   $1.75   $2.25   $0.50  Closed
PROX  $29.93   $32.94   APR25C/30C   $2.25   $3.25   $1.00  Closed
PTEK  $17.25   $16.19   MAY15C/17C   $1.00   $1.00   $0.00   Open
REV   $17.06   $25.38   MAY15C/17C   $1.50   $2.00   $0.50  Closed
RX   $32.75   $33.06    MAY37P/35P   $1.50   $1.62   $0.12   Open
TWX   $70.68   $67.00   JUN70C/75C   $2.38   $1.50  ($0.87)  Open
UTX  $135.62  $142.00  MAY125C/130C  $3.62   $4.00   $0.38   Open
WCII  $50.81   $45.94   MAY40C/45C   $3.75   $3.00   $0.75   Open
WMT   $95.00   $94.94   MAY90C/95C   $3.12   $2.75  ($0.38)  Open
XCIT $135.93  $139.38  MAY110C/125C  $9.00   $9.12   $0.12   Open
ZD    $25.50   $17.13   APR17C/22C   $3.38   $4.38   $1.00  Closed

* BPA, BR, EGGS, FORE, INTU, MER, NSOL, NTLI, PRD, PROX, REV and
  ZD were closed prior to expiration.

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

ICST  $16.62  $18.38  APR17C/APR15P  $2.00   $1.75 ($0.25) Closed
LSI   $27.06  $36.13  APR30C/APR25P  $1.50   $2.50  $1.00  Closed
PMS   $37.62  $28.69  MAY40C/MAY35P  $4.62   $5.12  $0.50  Closed

A debit-straddle is profitable when the value of the position
exceeds the initial cost of the spread. 

BUTTERFLY SPREADS:

HWP  $71.19   $70.38  APR65C/70C/75C $1.38   $2.00  $0.62  Closed
PG   $90.75   $98.25  APR85C/90C/95C $0.75   $1.00  $0.25  Closed
UK   $40.25   $52.63  APR37C/42C/47C $1.00   $1.75  $0.75  Closed

* HWP, PG and UK were closed prior to expiration and these plays
were excellent examples of the basic method for trading butterfly
positions that are initially centered. As time passes, the stock
price moves away from the center of the spread and outside of the
wings. If the stock crosses back through the middle strike of the
straddle, the position should be closed for a small profit.
******************************************************************
				- CREDIT STRADDLES -
******************************************************************
Stock  Pick     Last    Position   Credit  Cost    G/L     Status

TXN   $96.31  $109.75  APR110C/80P $2.12  $3.00  ($0.87)   Closed

* TXN actually expired profitably but the play was closed early
to limit possible losses.  (Just another error in my ways!)

Butterfly Straddle:

Stock  Pick    Last      Position     Credit  Cost  G/L    Status

AAPL  $37.19  $35.44  APR32P/35CP/35C $2.12  $0.43 $1.68   Closed
    
A credit-straddle is profitable if the cost to close the position
is less than the initial credit from the spread.
******************************************************************
				- NEW PLAYS -
******************************************************************
I receive lots of email requesting neutral strategies. The most
common type of non-directional combination is the debit straddle.
The problem is; this technique has not been as favorable as you
might think because options continue to be so overpriced. However,
after some diligent research (and a little extra time with the
probability calculator), I uncovered a few candidates. These plays
qualify because the options are reasonably priced and the issues
have demonstrated the ability to move the required distance in the
allotted time or they have a favorable technical pattern such as a
'rolling' trend.

Straddle techniques:

I really don't like to make recommendations for any strategy
because there are always so many different ways to achieve a
favorable outcome and most of them are more or less based on
personal preference. The two most common methods for straight
straddles (no double-ups or ratio positions) are: Hold both of
the positions until one has paid for the other then sell them
together for a net profit...or, take small profits on each of
the positions, providing the stock has a reasonable rolling
or channeling movement and no major directional trend or bias.

In this case, we have plenty of time and a very active market
to support our speculation of volatility but remember that the
premium in a long option is always eroding. As we get near the
last month of the option's expiration, you should start to plan
your exit (as time really begins to work against you), and try
to use the daily movement in the stock price to your benefit.

Good Luck!
******************************************************************
PZN - Prison Realty  $17.50     *** You Always Need These! ***

Prison Realty is a real estate investment trust that builds,
buys, and manages prisons in Australia, Puerto Rico, the UK,
and the US. The trust owns 44 correctional facilities and it
manages more than 68,000 prison beds in nearly 80 facilities.
The company provides renovation of existing jails and prisons
that it leases to both private and governmental managers. They
also provides prisoner transportation through its TransCor
America unit. 

The REIT, formerly known as CCA Prison Realty Trust, was spun
off from Corrections Corporation of America (CCA) in 1997 to
take over ownership of several CCA correctional facilities and
lease them back to CCA. The parent company (CCA) has now been
merged into Prison Realty to take advantage of the REIT status.

The company is continues to build new facilities and renovate
older structures to house Americas growing inmate population.
Revenues and future earnings are favorable but what makes this
play attractive is the technical history of the stock. A trend
is always in effect, it never really consolidates or moves to
the East. Change is a good thing and we hope it continues for
the next few months.

PLAY (conservative/debit straddle):

BUY CALL NOV-17.50 PZN-KW OI=205 A=$2.19
BUY PUT  NOV-17.50 PZN-WW OI=72  A=$1.75
INITIAL NET DEBIT TARGET=$3.75 ROI TARGET=75%

Chart = http://quote.yahoo.com/q?s=PZN&d=3m
******************************************************************
RSV - Rental Service  $23.50     *** Merger Gone South? ***

Rental Service is one of the largest equipment rental firms in
the US, along with Hertz and United Rentals. The company serves
the industrial, manufacturing, construction & homeowner markets
with items ranging from hand tools to backhoes. They also sell
parts, supplies and used rental equipment. They distribute new
equipment for manufacturers, and provides support services,
including onsite maintenance and repair. Rental Service has more
than 220 locations in the US and Canada.

United Rentals, the largest rental equipment company in North
America, recently launched a hostile $22.75 a share offer for
Rental Service. The company had previously agreed to merge with
NationsRent and their board determined that the offer by United
Rentals (at that price) was inadequate. They soundly rejected
the $553 million offer in favor of the planned friendly union
with a smaller industry player. RSV reiterated their intention
to pursue the transaction with NationsRent, first announced in
January. The merger calls for RSV to buy NationsRent in a stock
deal currently valued at about $420 million. Wall Street had
widely expected Rental Service to reject the USR offer, which
also calls for the assumption of $810 million in debt and some
experts said United Rentals will be forced to raise the bid if
it really wants to aquire Rental Service. Analysts suggest that
Rental Service is just indirectly saying they want a higher bid.

Lots of rumors are good for a play like this...

PLAY (conservative/debit straddle):

BUY CALL SEP-22.50 RSV-IX OI=1 A=$2.50
BUY PUT  SEP-25.00 RSV-UE OI=0 A=$2.37
INITIAL NET DEBIT TARGET=$4.62 TARGET ROI=75%

Chart = http://quote.yahoo.com/q?s=RSV&d=3m
******************************************************************
                          - SPREADS -
******************************************************************
CNXT - Conextant Systems  $29.50     *** Earnings Play! ***

Conexant was Rockwell International's semiconductor operations
until being spun off from the electronic components giant in
1998. It continues to expand its product lines to offset the
sagging sales of its flagship PC modem chip business. Its other
product divisions provide chips for personal imaging, wireless
communications, digital info-tainment, and network access.

Conexant is a player in the hot market for more cutting-edge
communications chips. Their share value has risen 50% since
going public in January. CNXT's main strength is its unique
ability to integrate software and support components into its
chips. By combining the two, Conexant can lower the chip costs
for makers of computers and related devices and that will help
it compete with the giants of the industry like Lucent.

Their aggressive cost-cutting effort has brought new profits
faster than anyone had expected. The First Call consensus calls
for a loss of $0.01 a share in the March quarter, compared with
a $0.17 loss last year. Speculation on the street is they will
easily beat the estimates and the options are overpriced as
a result of the speculation. We will use the small disparity
in the ITM position to make this play favorable.

PLAY (conservative/debit spread):

BUY  CALL MAY-22.50 QXN-EX OI=20  A=$8.00
SELL CALL MAY-25.00 QXN-EE OI=397 B=$6.12
INITIAL NET DEBIT TARGET=$1.75 ROI(max)=42% B/E=$24.25

PLAY (aggressive/debit spread):

BUY  CALL MAY-22.50 QXN-EX OI=20  A=$8.00
SELL CALL MAY-30.00 QXN-EF OI=369 B=$3.75
INITIAL NET DEBIT TARGET=$4.00 ROI(max)=87% B/E=$26.50

Chart = http://quote.yahoo.com/q?s=CNXT&d=3m
******************************************************************
NEM - Newmont Gold  $21.25     *** Volatility Play ***

Newmont Mining's primary subsidiary, Newmont Gold, is the biggest
gold producer in the US; its Carlin Trend operations and other
Nevada mines produce more than two million ounces of gold each
year, about 70% of total production. The company also owns the
Mesquite Mine in Southern California through its acquisition of
Santa Fe Pacific. They have a large stake in Peru's Yanacocha
Mine and also produce gold through operations in Uzbekistan and
Indonesia. Newmont conducts worldwide exploration to meet future
demands.

U.S. gold producers are in better shape than overseas competitors,
but the outlook for the industry clearly rests on gold prices and
the ability to find technical means of lowering costs. U.S. gold
miners have brought the break-even bullion price down to $289 per
ounce (as of 1997) with cost-cutting techniques and they have made
great progress in operational efficiency only to be rewarded with
low prices for both their metal and their equity market values. In
addition to cutting production costs, gold producers have achieved
savings through mergers, acquisitions and joint ventures. Another
issue that may help in the coming months is the rebound in Asian
demand, and the slumping world equity markets.

From a strategic view, this is a great hedge position with the
current uncertainty in the stock market. We also like the long
term technical base being established for world gold prices and
the underlying stock seems to have found a comfortable trading
range near $20. The recent uptrend provides us with a favorable
entry into this neutral position.

PLAY (conservative/calendar spread):

BUY  CALL SEP-22.50 NEM-IX OI=410 A=$2.75
SELL CALL MAY-22.50 NXV-EX OI=60  B=$1.19
INITIAL NET DEBIT TARGET=$1.38 TARGET ROI=100%

Time spreads (horizontal spreads) involve the sale of one
option and the purchase of a more distant option, both with
the same strike price. The basic strategy implies a NEUTRAL
philosophy based on the fact that TIME will erode the value
of the near-term option at a faster rate than it will the
far-term option. Each month, we will sell a new position to
reduce the cost-basis of our long-term option.

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


*****************************************************
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                       DISCLAIMER
*************************************************************
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            4-18-99
Sunday                6  of  6

*********************
COVERED CALL SECTION
*********************
The Tortoise And The Hare...

It was another great month for the covered-calls portfolio and
we would like to thank those of you who submitted your success
stories with the recommendations from this section. There were
many of our readers that earned well above the target returns
that we focus on for this strategy but a few of our subscribers
were still disappointed that they "missed out" on larger gains
with stocks like CUST, IDTC, NTPA, VYTL and NDB. Some of these
issues doubled or tripled while we managed only a 5% or 10%
profit but that is the compromise that you must accept with a
low risk technique like covered writing. Remember, our goal in
this section is to return 3% to 5% per month on atleast 85% of
the recommended positions. Our overall objective is to provide
plays that make acceptable returns while still retaining an
above-average amount of protection. This allows your portfolio
to grow consistently (and with very little risk), month after
month, in markets of any character. Try to remember this the
next time one of our picks (your play) goes from $7 to $25 and
you get called out at $7.50.

Good Luck!
******************************************************************
SUMMARY OF PREVIOUS PICKS (Final Summary for April)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt    Profit   ROI   Monthly
Sym    Picked Price        Price   Bid    /Loss          ROI

MI     16.56  18.19   Apr  15.00  2.56  *$  1.00   7.1%  31.0%
PROX   30.00  32.94   Apr  30.00  3.88  *$  3.88  14.9%  21.5%
ARTT   13.00  13.06   Apr  12.50  1.00  *$  0.50   4.2%  18.1%
KLOC   13.75  13.63   Apr  12.50  2.50  *$  1.25  11.1%  16.1%
FFD    10.88  10.00   Apr  10.00  2.00   $  1.12  12.6%  13.7%
NTPA   10.69  18.00   Apr   7.50  3.63  *$  0.44   6.2%  13.5%
BVSI    8.75  10.13   Apr   7.50  1.69  *$  0.44   6.2%  13.5%
MMCN   15.19  22.75   Apr  15.00  1.44  *$  1.25   9.1%  13.2%
ARTT    9.38  13.06   Apr   7.50  2.56  *$  0.68  10.0%  10.8%
DAOU    6.06   5.00   Apr   5.00  1.56   $  0.50  11.1%   9.7%
MTIC    5.88   5.69   Apr   5.00  1.44  *$  0.56  12.6%   9.1%
FORE   20.56  24.81   Apr  17.50  3.75  *$  0.69   4.1%   8.9%
UBS    11.88  11.44   Apr  12.50  1.25   $  0.81   7.6%   8.3%
PPOD   11.00  14.06   Apr  10.00  1.50  *$  0.50   5.3%   7.6%
CMTO   25.38  31.13   Apr  22.50  3.63  *$  0.75   3.4%   7.5%
MCHM    9.75  10.00   Apr   7.50  2.88  *$  0.63   9.2%   6.6%
AXTI   21.25  21.75   Apr  17.50  4.75  *$  1.00   6.1%   6.6%
CUST   11.75  34.38   Apr  10.00  2.31  *$  0.56   5.9%   6.4%
FORE   18.75  24.81   Apr  15.00  4.38  *$  0.63   4.4%   6.4%
IDTC   17.25  29.50   Apr  15.00  2.88  *$  0.63   4.4%   6.4%
MMCN   14.56  22.75   Apr  12.50  2.75  *$  0.69   5.8%   6.3%
OMKT   14.00  14.88   Apr  12.50  2.00  *$  0.50   4.2%   6.0%
ESPI   10.88  13.88   Apr   7.50  3.75  *$  0.37   5.2%   5.6%
PROX   29.13  32.94   Apr  25.00  4.75  *$  0.62   2.5%   5.5%
VYTL   25.50  38.13   Apr  22.50  4.00  *$  1.00   4.7%   5.1%
GALT   23.94  25.00   Apr  20.00  5.00  *$  1.06   5.6%   4.9%
FORE   13.13  24.81   Apr  10.00  3.63  *$  0.50   5.3%   4.9%
NWAC   25.69  30.25   Apr  25.00  2.00  *$  1.31   5.5%   4.8%
PWAV   28.94  34.88   Apr  25.00  5.13  *$  1.19   5.0%   4.3%
NDB    26.88  50.31   Apr  22.50  5.00  *$  0.62   2.8%   4.1%
AMMB    9.88   7.06   Apr   7.50  2.88   $  0.06   0.9%   0.7%
ENZN   16.56  14.00   Apr  15.00  2.38   $ -0.18  -1.3%   0.0%
COOL   20.63  16.13   Apr  17.50  4.25   $ -0.25  -1.5%   0.0%
SUGN   22.50  16.13   Apr  17.50  5.50   $ -0.87  -5.1%   0.0%
--------------------------------------------------------------
AND     7.75   9.88   May   7.50  1.25  *$  1.00  15.4%  11.1%
QGLY    5.13   5.03   May   5.00  0.63  *$  0.50  11.1%   8.0%
GSTX   11.06  12.63   May  10.00  2.13  *$  1.07  12.0%   7.4%
PILL   16.88  19.00   May  15.00  3.25  *$  1.37  10.1%   7.3%
HYPT   12.50  12.66   May  10.00  3.38  *$  0.88   9.6%   7.0%
FIBR   25.13  22.88   May  20.00  7.00  *$  1.87  10.3%   6.4%
LBFC   10.69  11.50   May  10.00  1.50  *$  0.81   8.8%   6.4%
KLOC   13.75  13.63   May  10.00  4.75  *$  1.00  11.1%   6.0%
ARTT   13.00  13.06   May  10.00  3.75  *$  0.75   8.1%   5.9%
HDL    13.88  14.38   May  12.50  2.31  *$  0.93   8.0%   5.8%
OMKT   16.13  14.88   May  12.50  4.50  *$  0.87   7.5%   5.4%
EXCA   14.25  18.81   May  12.50  2.75  *$  1.00   8.7%   5.4%
EGGS   17.63  15.19   May  15.00  3.63  *$  1.00   7.1%   5.2%

-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.
******************************************************************
NEW PICKS   
******************************************************************
Definitions:
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

BNYN   15.88  May 12.50  QYN EV  4.00  54    11.88   5.22%   5.22%
DBCC   17.75  May 15.00  BQD EC  4.00  1089  13.75   9.09%   9.09%
ETV     7.56  May  7.50  ETV EU  1.13  232    6.43  16.64%  16.64%
GCTI   17.00  May 12.50  QHF EV  5.13  108   11.87   5.31%   5.31%
MI     18.38  May 12.50   MI EV  7.00  73    11.38   9.84%   9.84%
NAVR   15.88  May 12.50  QHQ EV  4.25  486   11.63   7.48%   7.48%
OMKT   15.00  May 12.50  OQM EV  3.38  1145  11.62   7.57%   7.57%
PILL   19.00  May 15.00  PQQ EC  5.50  1049  13.50  11.11%  11.11%
******************************************************************
Sequenced by Return Called 
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

ETV     7.56  May  7.50  ETV EU  1.13  232    6.43  16.64%  16.64%
PILL   19.00  May 15.00  PQQ EC  5.50  1049  13.50  11.11%  11.11%
MI     18.38  May 12.50   MI EV  7.00  73    11.38   9.84%   9.84%
DBCC   17.75  May 15.00  BQD EC  4.00  1089  13.75   9.09%   9.09%
OMKT   15.00  May 12.50  OQM EV  3.38  1145  11.62   7.57%   7.57%
NAVR   15.88  May 12.50  QHQ EV  4.25  486   11.63   7.48%   7.48%
GCTI   17.00  May 12.50  QHF EV  5.13  108   11.87   5.31%   5.31%
BNYN   15.88  May 12.50  QYN EV  4.00  54    11.88   5.22%   5.22%
******************************************************************
Sequenced by Return Not Called
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost    RC      RNC
Sym               Price  Symbol  Bid   Intr  Basis

           SAME AS "RETURN CALLED" - ALL PLAYS ARE ITM
******************************************************************
Company Descriptions
******************************************************************
BNYN - Banyan Systems  $15.88     *** On The Rebound! ***

Banyan Systems makes networking and Internet software that helps
users locate resources and other users. They also offer Internet
directories and Banyan's customers include PCS Group, Siemens,
and the US Air Force. More than a third of sales are outside the
US. A recent upgrade, a huge deal with Qwest and the possible
IPO offering of Switchboard (their online directory and in recent
partnership with Cox Interactive Media) seem to be fueling the 
next rally. Earnings expected around 4/21.

May 12.50 QYN-EV Bid=4.00 OI=54 CB=11.88 RC=5.22% RNC=5.22% 

Chart = http://quote.yahoo.com/q?s=BNYN&d=3m
******************************************************************
DBCC - Data Broadcasting Corp.  $17.75  *** New Rally ***

Data Broadcasting Corp. directly and through its subsidiaries, 
distributes financial data and business information on a 
subscription basis to individual and professional investors and 
businesses. Consolidating after the rally based on the market-
watch.com IPO and renewed strength is appearing in the charts.
DBCC had new coverage initiated on Monday, lets see what happens!

May 15.00 BQD-EC Bid=4.00 OI=1089 CB=13.75 RC=9.09% RNC=9.09% 

Chart = http://quote.yahoo.com/q?s=DBCC&d=3m
******************************************************************
ETV - E4L, Inc.  $7.56  *** Live Online Infomercials ***

ETV uses direct response transactional television programming, 
known as infomercials, to market consumer products. They make 
infomercial programming available to 370 million households in 
70 countries. Recently had coverage initiated and started "Live
Celebrity Chats", (live online infomercials). The tape reflects
renewed strength which suggests E4L will move up and out of its
recent consolidation.

May 7.50 ETV-EU Bid=1.13 OI=232 CB=6.43 RC=16.64% RNC=16.64% 

Chart = http://quote.yahoo.com/q?s=ETV&d=3m
******************************************************************
GCTI - Genesys Telecommunication  $17.00  *** Technicals Only ***

GCTI is a provider of enterprise-wide platform and applications 
software that enables organizations to integrate critical business
information and computing resources with telephony and other
telecommunications media. The chart is bearish (long term) but
the recent resolution of the short term pattern is bullish with a
double-bottom formation. Earnings are due sometime this week and
the tape is definitely showing a change of character.

May 12.50 QHF-EV Bid=5.13 OI=108 CB=11.87 RC=5.31% RNC=5.31% 

Chart = http://quote.yahoo.com/q?s=GCTI&d=3m
******************************************************************
MI - Marshall Industries  $18.38     *** No One Knows! ***

MI distributes industrial electronic components and production 
supplies. MI also provides services, such as inventory management,
kitting, programming of programmable logic devices and testing 
services. Well, the tape continues to improve, with no real news.
We had a one week play last week and move to a longer term play
but deep ITM until we get an explanation for this action. Still
not a bad play as the cost basis would sustain almost a $6 drop
in the stock price.

May 12.50 MI-EV Bid=7.00 OI=73 CB=11.38 RC=9.84% RNC=9.84% 

Chart = http://quote.yahoo.com/q?s=MI&d=3m
******************************************************************
NAVR - Navarre Corporation  $15.88  *** IPO Speculation ***

NAVR is engaged in the distribution of prerecorded music and 
personal computer software in the U.S. NAVR's products include 
compact discs, cassettes, personal computer software and 
interactive CD-ROM software. Is the recent up trend fueled by
the future NetRadio IPO (in which Navarre owns a majority)
interest? Only time will tell! The technicals have shown recent
strength with support near the cost basis.

May 12.50 QHQ-EV Bid=4.25 OI=486 CB=11.63 RC=7.48% RNC=7.48% 

Chart = http://quote.yahoo.com/q?s=NAVR&d=3m
******************************************************************
OMKT - Open Market, Inc. $15.00  *** Web Auction Market ***

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. Open Market announced a partnership with
OpenSite Technologies Inc., a leader in online auction software.
Looks like an Internet auction site showdown is in the future.
The tape is showing great strength and has OMKT poised to move
higher with a strong support area near our strike price. Earnings
expected sometime around 4/22.

May 12.50 OQM-EV Bid=3.38 OI=1145 CB=11.62 RC=7.57% RNC=7.57% 

Chart = http://quote.yahoo.com/q?s=OMKT&d=3m
******************************************************************
PILL - ProxyMed, Inc.  $19.00  *** Just Keeps Going!?! ***

PILL provides healthcare electronic data interchange ("EDI") 
products and services to physicians, independent physician
associations, insurance payers, pharmacies, laboratories and 
nursing homes. ProxyMed continues to climb (and is overextended)
with no recent news. The message boards have some rumors of a
buy-out. The stock is in a stage II climb with no end in sight
(famous last words?) and just made a new high on Friday.

May 15.00 PQQ-EC Bid=5.50 OI=1049 CB=13.50 RC=11.11% RNC=11.11% 

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


*******************************
CALLS STRICTLY PERCENTAGE LIST
*******************************
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 
start.

Stock   Price Month Strike Symbol Price  PctRtn   Vol OpnInt
CLFY    20.00 May  20.00  QCYED    4.38   21.88     4   184
EDFY     8.13 May  10.00   YQEB    1.50   18.46   158   352
NMSS     4.13 May   5.00  YYQEA    0.75   18.18   110   145
AND      9.75 May  10.00  ANDEB    1.69   17.31    87  1114
GCTI    16.88 May  17.50  QHFEW    2.81   16.67   104   225
SAVLY   10.75 May  12.50  QVYEV    1.75   16.28   716   180
MCHM    10.00 May  10.00   QQEB    1.63   16.25   112   711
IDTC    29.50 May  30.00  IQJEF    4.75   16.10   403  1990
PILL    19.00 May  20.00  PQQED    3.00   15.79   282   183
BLDPF   29.50 May  30.00  DFQEF    4.63   15.68     2   461
OMKT    14.88 May  15.00  OQMEC    2.31   15.55   397  2934
PLCM    29.81 May  30.00  QHDEF    4.63   15.51   230   327
MI      18.19 May  20.00   MIED    2.75   15.12   171    10
ODIS     4.16 May   5.00  QSEEA    0.63   15.04    26   163
GEMS     4.25 May   5.00  GQMEA    0.63   14.71    15   592
ARQL     4.00 May   5.00  QETEA    0.56   14.06   123   125
DCTM    14.25 May  15.00  QDCEC    2.00   14.04   402  1415
USWB    28.50 May  30.00  QWBEF    4.00   14.04   535   936
WSTL     6.75 May   7.50  QLWEU    0.94   13.89   199   872
SNDK    22.63 May  25.00  SWQEE    3.13   13.81    50    77
PAX     10.00 May  10.00  PAXEB    1.38   13.75    22    44
CYCH    18.63 May  20.00  KBQED    2.50   13.42   112   246
PPOD    14.06 May  15.00  QPPEC    1.88   13.33   121   295
PDX     15.00 May  15.00  PDXEC    1.94   12.92    51  1018
CPWR    19.63 May  20.00  CWQED    2.50   12.74   826   890
ELIX    14.88 May  15.00  XQQEC    1.88   12.61    60   187
CBSI    17.38 May  17.50  CQQEW    2.19   12.59    12   343
GLFD    10.00 May  10.00  GQFEB    1.25   12.50    50    10
MOGN    10.00 May  10.00  QOGEB    1.25   12.50    27    60
PCTL     8.06 May  10.00  PTQEB    1.00   12.40   260   160
PTEK    16.19 May  17.50  TQOEW    2.00   12.36   163  1310
SKYT    18.25 May  20.00  MMQED    2.25   12.33   461  2684
WIND    14.19 May  15.00  QWVEC    1.75   12.33    33   211
ASDV     7.13 May   7.50  QDVEU    0.88   12.28    68   648
SPYG    15.81 May  17.50  YQGEW    1.94   12.25   153   425
QMDC     6.19 May   7.50  QCDEU    0.75   12.12    55   142
MXG      9.81 May  10.00  MXGEB    1.19   12.10    20    28
FORE    24.81 May  25.00  FQOEE    3.00   12.09  3477  4693
CDO     24.94 May  25.00  CDOEE    3.00   12.03   164   589
CLCX     4.75 May   5.00  QXTEA    0.56   11.84    40   499
SEV      4.25 May   5.00  SEVEA    0.50   11.76    10   127
ESPI    13.88 May  15.00   AQEC    1.63   11.71   232  1234
PRMS     9.63 May  10.00  RQSEB    1.13   11.69     5   352
SAVLY   10.75 May  15.00  QVYEC    1.25   11.63    10   669
AXNT     9.69 May  10.00  XQEEB    1.13   11.61     5   113
SRCM    19.94 May  20.00   SQED    2.31   11.60   170   636
PHYC     4.31 May   5.00  PQHEA    0.50   11.59    20   210
WHIT    25.00 May  25.00  WMQEE    2.88   11.50    10   775
HLYW    24.00 May  25.00  HWQEE    2.75   11.46    81    70
NEWZ     9.81 May  10.00  QBEEB    1.13   11.46   150    34
ZD      17.00 May  17.50   ZDEW    1.94   11.40   112  2071
CYLK     4.94 May   5.00  YQBEA    0.56   11.39    73   453
PRD     19.81 May  20.00  PRDED    2.25   11.36    35   206
HYPT    12.66 May  15.00  QPIEC    1.44   11.36    50   106
HRBC     9.38 May  10.00   BQEB    1.06   11.33    28   133
BEV      5.00 May   5.00  BEVEA    0.56   11.25    20    20
NMGC    11.75 May  12.50  GJQEV    1.31   11.17   220   249
SCIO     9.00 May  10.00  JQSEB    1.00   11.11    96  1012
CYCH    18.63 May  22.50  KBQEX    2.06   11.07    72   359
EAII    21.50 May  22.50  QNEEX    2.38   11.05     5    27
ESTI     9.63 May  10.00  ELQEB    1.06   11.04    10   310
ERTH     9.06 May  10.00  QEREB    1.00   11.03    42  1318
ATAC     9.75 May  10.00  AQKEB    1.06   10.90    10   458
WAVO     8.66 May  10.00  WKQEB    0.94   10.83   470  2591
ANTC    22.19 May  22.50  AQCEX    2.38   10.70    20  1758
RXSD    17.00 May  17.50  RKQEW    1.81   10.66    28   798
FFD     10.00 May  10.00  FFDEB    1.06   10.63    94   434
WDC      7.06 May   7.50  WDCEU    0.75   10.62   107   694
IMNR     8.84 May  10.00  IMQEB    0.94   10.60   126  1529
IMCL    16.63 May  17.50  QCIEW    1.75   10.53    66   711
FEET    12.50 May  12.50  JQFEV    1.31   10.50    67   197
OWN      9.63 May  10.00  OWNEB    1.00   10.39     6   130
RMDY    13.88 May  15.00  LRQEC    1.44   10.36    24   683
PTVL    22.94 May  25.00  QUTEE    2.38   10.35   226   436
CS       7.25 May   7.50   CSEU    0.75   10.34   128   596
DIMD     7.25 May   7.50  DAQEU    0.75   10.34   124   519
TWMC    11.50 May  12.50  TQTEV    1.19   10.33    31   174
CLFY    20.00 May  22.50  QCYEX    2.06   10.31    12   311
EXCA    18.81 May  20.00  XQAED    1.94   10.30     5   479
KNT      9.13 May  10.00  KNTEB    0.94   10.27    70    56
ICGX    23.13 May  25.00  QIGEE    2.38   10.27   314   424
AND      9.75 May  12.50  ANDEV    1.00   10.26   129   790
BYD      4.88 May   5.00  BYDEA    0.50   10.26    13  1735
BNYN    15.88 May  17.50  QYNEW    1.63   10.24   116   119
ANAD    18.94 May  20.00  DQAED    1.94   10.23    45   158
CELG    18.38 May  20.00  LQHED    1.88   10.20    23     8
SDTI    19.63 May  20.00  QSDED    2.00   10.19    73   332
CLN      7.38 May   7.50  CLNEU    0.75   10.17     6   103
MANU     7.38 May   7.50  ZUQEU    0.75   10.17    59   331
PAH      4.94 May   5.00  PAHEA    0.50   10.13    20   424
TDFX    19.88 May  20.00   FQED    2.00   10.06    20   538
VSIO    24.94 May  25.00  VQJEE    2.50   10.03     6   162
MEDQ    29.94 May  30.00  QQUEF    3.00   10.02    10    47
MCRE     6.88 May   7.50  MQZEU    0.69   10.00    40   488
PDQ     12.50 May  12.50  PDQEV    1.25   10.00   344   907
VLNC     6.88 May   7.50  VHQEU    0.69   10.00    18   257
MCHM    10.00 Jun  10.00   QQFB    2.38   23.75    46  1157
HRBC     9.38 Jun  10.00   BQFB    2.00   21.33   152   697
CYCH    18.63 Jun  20.00  KBQFD    3.88   20.81    19   537
GEMS     4.25 Jun   5.00  GQMFA    0.88   20.59    50   624
IDTC    29.50 Jun  30.00  IQJFF    6.00   20.34    11   498
PRTL    15.63 Jun  17.50  PQWFW    3.00   19.20     5    77
PPOD    14.06 Jun  15.00  QPPFC    2.56   18.22    10    23
ESPI    13.88 Jun  15.00   AQFC    2.50   18.02   131   844
VTEL     5.94 Jun   7.50  VQEFU    1.06   17.89    50   843
MCHM    10.00 Jun  12.50   QQFV    1.75   17.50     5   740
CYCH    18.63 Jun  22.50  KBQFX    3.25   17.45   104  1237
GCTI    16.88 Jun  20.00  QHFFD    2.88   17.04     7   164
TWMC    11.50 Jun  12.50  TQTFV    1.94   16.85     5   442
ASDV     7.13 Jun   7.50  QDVFU    1.19   16.67     6    54
FFD     10.00 Jun  10.00  FFDFB    1.63   16.25    20   921
GHV      6.63 Jun   7.50  GHVFU    1.06   16.04    70   284
BEAM    12.69 Jun  15.00  BAQFC    2.00   15.76    22  1551
TDFX    19.88 Jun  20.00   FQFD    3.13   15.72    76    89
NETA    16.06 Jun  17.50  CQMFW    2.50   15.56    34  1449
TERA     6.44 Jun   7.50  QIPFU    1.00   15.53    14  1015
DBCC    17.69 Jun  20.00  BQDFD    2.69   15.19     5  1504
AMMB     7.06 Jun   7.50  UKQFU    1.06   15.04    10   487
RMDY    13.88 Jun  15.00  LRQFC    2.06   14.86    10   149
SKYT    18.25 Jun  20.00  MMQFD    2.69   14.73    48  1487
SKYC    13.88 Jun  15.00  KQFFC    2.00   14.41     3    20
MXG      9.81 Jun  10.00  MXGFB    1.38   14.01    50     5
WND      8.94 Jun  10.00  WNDFB    1.25   13.99   189   337
PESC    16.63 Jun  17.50  UVQFW    2.25   13.53    20    27
INTS    11.81 Jun  12.50  QINFV    1.56   13.23    10    52
PAX     10.00 Jun  10.00  PAXFB    1.31   13.13    41   331
GSTRF   20.00 Jun  20.00  YVQFD    2.63   13.13    15  3544
UBS     11.44 Jun  12.50  UBSFV    1.50   13.11    20  1449
CFN      6.25 Jun   7.50  CFNFU    0.81   13.00     2   665
ASYT    18.50 Jun  20.00  QQYFD    2.38   12.84     5   177
AVID    21.00 Jun  22.50  AQIFX    2.69   12.80     3   111
VIRS    13.69 Jun  15.00  VQPFC    1.75   12.79    39   204
ESPI    13.88 Jun  17.50   AQFW    1.75   12.61     5   352
XIRC    22.88 Jun  25.00  XQRFE    2.88   12.57     5   139
KMAG     4.00 Jun   5.00  KMQFA    0.50   12.50    20   282
EAII    21.50 Jun  25.00  QNEFE    2.69   12.50    50    37
HMAR     2.50 Jun   5.00  VQHFA    0.31   12.50    30   192
MAST    13.06 Jun  15.00  QACFC    1.63   12.44    10    74
CYCH    18.63 Jun  25.00  KBQFE    2.31   12.42    55   536
EGGS    15.19 Jun  17.50  EGQFW    1.88   12.35    27   812
GLBL     9.63 Jun  10.00  GQOFB    1.19   12.34    16  1064
FLC      9.38 Jun  10.00  FLCFB    1.13   12.00  1360  3416
FEET    12.50 Jun  12.50  JQFFV    1.50   12.00     3   480
VNTV     9.38 Jun  10.00  QTZFB    1.13   12.00    20   143
APEX    16.69 Jun  17.50  PXQFW    2.00   11.99    27   235
CERN    16.38 Jun  17.50  CQNFW    1.94   11.83    40   584
CKR     16.44 Jun  17.50  CKRFW    1.94   11.79     7    46
BTIM    12.88 Jun  15.00  QBOFC    1.50   11.65    45   377
ENER     8.63 Jun  10.00  EQIFB    1.00   11.59   133   716
PHYC     4.31 Jun   5.00  PQHFA    0.50   11.59    80   340
IDC      4.94 Jun   5.00  IDCFA    0.56   11.39   110  4498
GSTX    12.63 Jun  15.00  QGSFC    1.44   11.39    10   312
APCC    29.44 Jun  30.00  PWQFF    3.25   11.04    68   411
AVID    21.00 Jun  25.00  AQIFE    2.31   11.01     8   196
ORCL    24.50 Jun  25.00  ORQFE    2.69   10.97   160  6437
SKYT    18.25 Jun  22.50  MMQFX    2.00   10.96    90   677
SYBS     9.13 Jun  10.00  SBQFB    1.00   10.96   314  2219
BEAM    12.69 Jun  17.50  BAQFW    1.38   10.84   100   423
ICGX    23.13 Jun  25.00  QIGFE    2.50   10.81   123   928
STK     19.75 Jun  20.00  STKFD    2.13   10.76    81    20
CELL     5.81 Jun   7.50  QEFFU    0.63   10.75    55  1631
BEAS    16.44 Jun  17.50  BRQFW    1.75   10.65    80  1418
EXCA    18.81 Jun  20.00  XQAFD    2.00   10.63    11    60
PIR      7.06 Jun   7.50  PIRFU    0.75   10.62    86   900
NVX      6.50 Jun   7.50  NVXFU    0.69   10.58    60   310
ETEC    24.88 Jun  25.00  EBQFE    2.63   10.55     5    49
VTEL     5.94 Jun  10.00  VQEFB    0.63   10.53   100   460
AFCI     8.94 Jun  10.00  AQFFB    0.94   10.49    20  1931
CHRZ    13.13 Jun  15.00  ZQHFC    1.38   10.48   149   449
BELM     6.75 Jun   7.50  QBLFU    0.69   10.19    60    17
TDFX    19.88 Jun  22.50   FQFX    2.00   10.06     5    41
PDG     12.44 Jun  12.50  PDGFV    1.25   10.05   122  2823
RSND     5.00 Jun   5.00  RQDFA    0.50   10.00    29   133
ODIS     4.16 Jul   5.00  QSEGA    1.13   27.07     1   241
PCTL     8.06 Jul  10.00  PTQGB    1.81   22.48    62  1174
DCTM    14.25 Jul  15.00  QDCGC    3.13   21.93     7   133
USWB    28.50 Jul  30.00  QWBGF    6.13   21.49    36   224
SRCM    19.94 Jul  20.00   SQGD    4.25   21.32     1   570
FILE     7.25 Jul   7.50  ILQGU    1.50   20.69    20   186
AKLM     7.25 Jul   7.50  KKQGU    1.44   19.83    10  1190
SPYG    15.81 Jul  17.50  YQGGW    3.13   19.76     8   424
PLCM    29.81 Jul  30.00  QHDGF    5.88   19.71    82    88
BNYN    15.88 Jul  17.50  QYNGW    3.13   19.69    40   267
MERQ    27.38 Jul  27.50  RQBGY    5.25   19.18    20   120
TRA      5.00 Jul   5.00  TRAGA    0.94   18.75    30   189
PTVL    22.94 Jul  25.00  QUTGE    4.25   18.53   131   642
ZD      17.00 Jul  17.50   ZDGW    3.13   18.38    16  1942
HLYW    24.00 Jul  25.00  HWQGE    4.38   18.23    74    19
CDO     24.94 Jul  25.00  CDOGE    4.50   18.05    17   566
ORCTF   29.63 Jul  30.00  QFYGF    5.25   17.72    10     5
NMGC    11.75 Jul  12.50  GJQGV    2.06   17.55    20   440
DIMD     7.25 Jul   7.50  DAQGU    1.25   17.24     5  1347
POSS    10.94 Jul  12.50  UPQGV    1.88   17.14     4   116
HS       2.94 Jul   5.00   HSGA    0.50   17.02     5   880
IMG      8.13 Jul  10.00  IMGGB    1.38   16.92   398   986
SVRN    14.25 Jul  15.00  SQVGC    2.38   16.67   255   958
WAXS    11.25 Jul  12.50  WXQGV    1.88   16.67    71   262
SRCM    19.94 Jul  22.50   SQGX    3.25   16.30    10   428
ABTX     6.25 Jul   7.50  QXQGU    1.00   16.00  1210  3686
FORE    24.81 Jul  25.00  FQOGE    3.88   15.62   154  1889
CS       7.25 Jul   7.50   CSGU    1.13   15.52    27  1129
SDTI    19.63 Jul  20.00  QSDGD    3.00   15.29    86   142
ESST     6.75 Jul   7.50  SEQGU    1.00   14.81    20   295
GSNX    11.88 Jul  12.50  GQSGV    1.75   14.74     2     4
SRM      9.88 Jul  10.00  SRMGB    1.44   14.56    40  2019
BFR     24.13 Jul  25.00  BFRGE    3.50   14.51     2    38
SRCM    19.94 Jul  25.00   SQGE    2.88   14.42    25   263
GELX    16.63 Jul  17.50  GQXGW    2.38   14.29     2    52
PTVL    22.94 Jul  30.00  QUTGF    3.25   14.17    17   366
SANG    12.88 Jul  15.00  QDYGC    1.81   14.08    11    20
ZD      17.00 Jul  20.00   ZDGD    2.38   13.97    13  1455
BRKT    16.63 Jul  17.50  BUQGW    2.31   13.91    12   254
SE      29.69 Jul  30.00   SEGF    4.13   13.89     5   455
FAF     14.94 Jul  15.00  FAFGC    2.06   13.81     3   210
FILE     7.25 Jul  10.00  ILQGB    1.00   13.79    40   330
VTR      3.63 Jul   5.00  VTRGA    0.50   13.79     5    35
NDE     15.00 Jul  15.00  NDEGC    2.06   13.75   514     5
WIT     16.81 Jul  17.50  WITGW    2.31   13.75   176  1702
INTL    14.63 Jul  15.00  TPQGC    2.00   13.68    10    47
ESCMF    6.44 Jul   7.50  QFCGU    0.88   13.59   110   248
WFR      6.94 Jul   7.50  WFRGU    0.94   13.51     9    30
BNYN    15.88 Jul  20.00  QYNGD    2.13   13.39     9  1438
ADSK    29.13 Jul  30.00  ADQGF    3.88   13.30     3   239
KLIC    22.75 Jul  25.00  KQSGE    3.00   13.19    17   244
PAIR    11.38 Jul  12.50  PQGGV    1.50   13.19    66  1563
WMS      9.56 Jul  10.00  WMSGB    1.25   13.07    10   547
PDE      9.13 Jul  10.00  PDEGB    1.19   13.01    50   413
RDRT     5.91 Jul   7.50  RDQGU    0.75   12.70    16   167
HNCS    19.88 Jul  25.00  NSQGE    2.50   12.58     8   214
TRL     10.94 Jul  12.50  TRLGV    1.38   12.57   125   320
MAVK     6.97 Jul   7.50  KQGGU    0.88   12.56    14    88
AEIS    30.00 Jul  30.00  OEQGF    3.75   12.50     4    42
SQNT     9.00 Jul  10.00  SQQGB    1.13   12.50    16   226
STN     14.56 Jul  15.00  STNGC    1.81   12.45     2   141
RPC     19.63 Jul  20.00  RPCGD    2.44   12.42     2    56
ADPT    23.88 Jul  25.00  APQGE    2.94   12.30    16   491
SDC     19.38 Jul  20.00  SDCGD    2.38   12.26    40   627
CELG    18.38 Jul  20.00  LQHGD    2.25   12.24    25   399
TALK    11.81 Jul  12.50  QQKGV    1.44   12.17   175   532
SPLH     8.75 Jul  10.00  QRXGB    1.06   12.14    30   196
SPYG    15.81 Jul  22.50  YQGGX    1.88   11.86     5   161
ENZ      9.00 Jul  10.00  ENZGB    1.06   11.81    10   388
APAC     3.19 Jul   5.00  AWQGA    0.38   11.76    20   402
SYMC    17.56 Jul  20.00  SYQGD    2.06   11.74    20   171
SRR     12.25 Jul  12.50  SRRGV    1.44   11.73     1   252
PCTL     8.06 Jul  12.50  PTQGV    0.94   11.63    18   124
SNDK    22.63 Jul  25.00  SWQGE    2.63   11.60    12   131
WHC     17.25 Jul  17.50  WHCGW    2.00   11.59    10    21
SPYG    15.81 Jul  25.00  YQGGE    1.81   11.46    11   384
AMD     16.38 Jul  17.50  AMDGW    1.88   11.45   289  2327
WALL    15.31 Jul  17.50  WLQGW    1.75   11.43     3    63
DCTM    14.25 Jul  22.50  QDCGX    1.63   11.40     4    16
VICR    13.25 Jul  15.00  VIQGC    1.50   11.32    36   148
APA     30.00 Jul  30.00  APAGF    3.38   11.25    93   459
DAOU     5.00 Jul   7.50  QQXGU    0.56   11.25    10   540
METHA   14.50 Jul  15.00  QMEGC    1.63   11.21    25    28
CVG     16.75 Jul  17.50  CVGGW    1.88   11.19     5   189
NMGC    11.75 Jul  15.00  GJQGC    1.31   11.17     2   345
CIEN    20.25 Jul  22.50  EUQGX    2.25   11.11   108  1443
ARQL     4.00 Jul  10.00  QETGB    0.44   10.94    75    52
CR      29.81 Jul  30.00   CRGF    3.25   10.90    50    16
TEO     29.50 Jul  30.00  TEOGF    3.13   10.59   300   376
GRDG     6.50 Jul   7.50  DQQGU    0.69   10.58    12    35
CDO     24.94 Jul  30.00  CDOGF    2.63   10.53    28    91
ORG     12.56 Jul  15.00  ORGGC    1.31   10.45   100   431
SCIO     9.00 Jul  12.50  JQSGV    0.94   10.42     3   152
COMS    20.63 Jul  22.50  THQGX    2.13   10.30    31  3400
BS       9.81 Jul  10.00   BSGB    1.00   10.19   166  2586
MOLX    29.63 Jul  30.00  MOQGF    3.00   10.13     5    59
BHI     27.38 Jul  27.50  BHIGY    2.75   10.05    88    95
ION     30.00 Jul  30.00  IONGF    3.00   10.00     7    22


*******************************
NAKED PUT SECTION
*******************************
A Trading Plan...

Market perspectives vary widely and no two investors are alike.
All of us have different financial backgrounds and experience
levels but even with this diversity, most stock/option trading
strategies can be classified into one of three basic categories:
Conservative; covered-calls, naked puts, LEAPS and index puts as
a portfolio hedge. Moderate; 3-6 month options on technical or
fundamental plays, ITM debit spreads or straddles and calendar
positions. Aggressive (or Speculative); short-term, news driven
or momentum positions, short straddles & strangles, ATM credit
spreads and Index options.

These are just some common examples and regardless of the type of
investing strategy you favor, the key is to determine your own
personal risk/reward attitude. Generally, a younger investor can
afford to be more aggressive because time will make up for a few
mistakes along the way. Those investors with substantial accounts
can also trade using higher risk techniques. Once you establish a
comfortable style of investing, you must try to construct a plan
for trading that meets your needs effectively. Most traders find
that a combination of strategies will provide the best balance of
risk and reward to accomplish their specific objectives.

Once you establish your tolerance for risk and have decided how
you are going to trade, you need to understand (completely!) any
strategy that you are using and what your specific goals are for
that particular trade. You can't make educated decisions without
knowing the mechanics of a specific technique. Don't use complex
or advanced methods simply because they are intriguing. The BEST
strategy is the simplest one that accomplishes your goals and all
successful traders develop target prices for potential plays and
they know their exits before going in. They take the human factor
out of trading by using STOPS (mental or mechanical) and other
types of GTC orders. The key is learning to trade on YOUR terms,
not the markets'...Good Luck!
------------------------------------------------------------------
                      *** 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.
******************************************************************
SUMMARY OF PREVIOUS PICKS (Final Summary for April)
******************************************************************
Stock  Price  Last    Mon  Strike  Opt    Profit   ROI   Monthly
Sym    Picked Price        Price   Bid    /Loss          ROI

HDL    13.25  14.38   Apr  12.50  0.69  *$  0.69  13.2%  28.6%
XCED   14.88  18.38   Apr  12.50  0.50  *$  0.50  12.3%  26.7%
WAVO    9.25   8.66   Apr   7.50  0.44  *$  0.44  18.4%  26.7%
DRMD    6.81   8.38   Apr   5.00  0.44  *$  0.44  24.4%  26.6%
GSB    24.50  23.06   Apr  22.50  0.50  *$  0.50   6.0%  26.2%
FIBR   25.13  22.88   Apr  20.00  0.56  *$  0.56  10.0%  21.8%
XCED   12.38  18.38   Apr  10.00  0.44  *$  0.44  14.6%  21.2%
ARTT    8.38  13.06   Apr   7.50  0.75  *$  0.75  23.3%  20.2%
PROX   30.00  32.94   Apr  25.00  1.13  *$  1.13  13.9%  20.1%
PROX   29.13  32.94   Apr  22.50  0.56  *$  0.56   8.8%  19.0%
NDB    25.13  50.13   Apr  20.00  1.06  *$  1.06  17.4%  18.9%
NDB    26.88  50.13   Apr  22.50  0.81  *$  0.81  11.3%  16.3%
TERN   39.13  47.13   Apr  30.00  0.63  *$  0.63   7.4%  16.2%
MCHM    9.75  10.00   Apr   7.50  0.56  *$  0.56  22.3%  16.2%
FORE   13.13  24.81   Apr  10.00  0.50  *$  0.50  16.0%  14.7%
CYCH   15.00  18.63   Apr  12.50  0.38  *$  0.38   9.8%  14.2%
MCHM   10.31  10.00   Apr   7.50  0.38  *$  0.38  15.6%  13.5%
EGGS   19.69  15.19   Apr  15.00  0.50  *$  0.50  11.3%  12.2%
COOL   20.63  16.13   Apr  15.00  0.38  *$  0.38   8.4%  12.2%
COOL   20.81  16.13   Apr  15.00  0.50  *$  0.50  10.7%  11.7%
DRIV   44.94  40.63   Apr  35.00  0.44  *$  0.44   4.7%  10.1%
PWAV   27.06  34.88   Apr  22.50  0.63  *$  0.63   9.1%   9.9%
MUSE   46.13  45.25   Apr  35.00  0.44  *$  0.44   4.6%   9.9%
RCNC   31.31  43.00   Apr  25.00  0.50  *$  0.50   7.4%   8.0%
ITX    15.06  14.00   Apr  12.50  0.31  *$  0.31   8.2%   7.1%
WKR    21.38  23.50   Apr  17.50  0.38  *$  0.38   7.5%   6.5%
NWAC   25.69  30.25   Apr  22.50  0.50  *$  0.50   6.6%   5.7%
ZD     25.06  17.00   Apr  17.50  0.75   $  0.25   4.3%   4.7%
ZD     24.63  17.00   Apr  17.50  0.63   $  0.13   2.3%   3.4%
AMMB    9.88   7.06   Apr   7.50  0.44   $  0.00   0.0%   0.0%
SUGN   22.50  16.13   Apr  17.50  0.56   $ -0.81 -16.0%   0.0%
--------------------------------------------------------------
CYCH   15.94  18.63   May  15.00  1.63  *$  1.63  23.1%  16.7%
ENMD   24.75  27.38   May  20.00  1.50  *$  1.50  22.6%  16.3%
ONSL   37.06  30.31   May  30.00  2.25  *$  2.25  22.5%  16.3%
PAIR    9.63  11.38   May   7.50  0.44  *$  0.44  18.6%  13.4%
BNYN   17.38  15.88   May  12.50  0.56  *$  0.56  13.9%  10.0%
DELL   43.63  38.25   May  35.00  0.88  *$  0.88   9.1%   6.6%
NMR    27.81  25.38   May  22.50  0.44  *$  0.44   7.0%   5.1%
NWAC   29.25  30.25   May  25.00  0.50  *$  0.50   6.3%   4.6%

-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)
******************************************************************
NEW PICKS
******************************************************************
Definitions:
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

CYCH   18.88  May 12.50  KBQ QV  0.50  30    12.00  11.69%
DELL   38.25  May 30.00  DLQ QF  0.63  16773 29.37   7.61%
NAV    43.56  May 35.00  NAV QG  0.75  475   34.25   7.80%
NETG   44.94  May 25.00  NUG QE  0.94  93    24.06   9.47%
PTEK   16.25  May 12.50  TQO QV  0.63  89    11.87  16.24%
PTVL   22.94  May 17.50  QUT QW  0.81  196   16.69  15.01%
VRIO   62.88  May 40.00  RLQ QH  1.56  255   38.44  11.04%
XCED   18.50  May 15.00  XCU QV  0.56  33    14.44  12.61%
******************************************************************
Sequenced by Return on Investment  
******************************************************************
Stock  Price  Mon Strike Option  Opt   Open  Cost   ROI Opt
Sym               Price  Symbol  Bid   Intr  Basis  Expired

PTEK   16.25  May 12.50  TQO QV  0.63  89    11.87  16.24%
PTVL   22.94  May 17.50  QUT QW  0.81  196   16.69  15.01%
XCED   18.50  May 15.00  XCU QV  0.56  33    14.44  12.61%
CYCH   18.88  May 12.50  KBQ QV  0.50  30    12.00  11.69%
VRIO   62.88  May 40.00  RLQ QH  1.56  255   38.44  11.04%
NETG   44.94  May 25.00  NUG QE  0.94  93    24.06   9.47%
NAV    43.56  May 35.00  NAV QG  0.75  475   34.25   7.80%
DELL   38.25  May 30.00  DLQ QF  0.63  16773 29.37   7.61%
******************************************************************
Company Descriptions
******************************************************************
CYCH - CyberCash  $18.88     *** Internet Commerce ***

CyberCash's products help consumers make online purchases. They
offer secure payment transaction services including electronic
cash payment and billing). The company's 'ICVerify' subsidiary
provides retailers with point-of-sale credit card authorization
software. Just announced a new service to minimize the impact of
launching an Internet business by offering a Web payment solution
that requires only a browser with an account to get started. Well
positioned in one of the core industries on the Internet.

May  12.50  KBQ QV  Bid=0.50  OI=30  CB=12.00  ROI=11.69%

Chart = http://quote.yahoo.com/q?s=CYCH&d=3m
******************************************************************
DELL - Dell Computers  $38.25     *** Earnings in May! ***

DELL sells PC's notebooks, servers and work stations that are
built to order, direct from their factories world-wide.  Dell is
the direct sales model leader and pioneer of the on-line retail
business with total annual sales of $18.2 bln. Despite the recent
fall from grace, they are growing at an annual rate of 38% with
margins that are the envy of the industry. Dell launched their
Internet site, Gigabuys.com, an "online superstore", to maintain
the leading edge in the PC sector. Earnings are expected to boost
the share price early next month.

May  30.00  DLQ QF  Bid=0.63  OI=16773  CB=29.37  ROI=7.61%

Chart = http://quote.yahoo.com/q?s=DELL&d=3m
******************************************************************
NAV - Navistar  $43.56     *** Own This One! ***

Navistar International is leading producer of heavy-duty trucks.
They also manufacture school buses and diesel engines. Navistar
provides financing and insurance for its dealers sells its diesel
engines to other truck makers, primarily Ford. Navistar operates
production plants in Brazil, Canada, Mexico, and exports products
to more than 70 countries. We like the fundamental outlook for
the company, the recent bullish technicals and the great entry
price to own it!

May  35.00  NAV QG  Bid=0.75  OI=475  CB=34.25  ROI=7.80%

Chart = http://quote.yahoo.com/q?s=NAV&d=3m
******************************************************************
NETG - Netgravity  $44.94     *** Pure Internet Speculation ***

NetGravity is the leading provider of software for managing online
advertising and direct marketing. Its AdServer software automates
ad inventory management, scheduling, reporting, and analysis. It
also increases the cost-effectiveness of advertising by allowing
specific consumer segments to be targeted. They just announced a
worldwide marketing partnership with Phase2Media for advertising
sales representation offering Web sites a total package for ad
management, sales and targeting. Play this one if you like to live
life on the edge!

May  25.00  NUG QE  Bid=0.94  OI=93  CB=24.06  ROI=9.47%

Chart = http://quote.yahoo.com/q?s=NETG&d=3m
******************************************************************
PTEK - Premier Technologies  $16.25   *** New Deal! ***

Premiere Technologies offers a variety of messaging and telecom
services; voice mail, fax and e-mail delivery, conference calling,
calling cards, personal 800 numbers, information delivery, and
interactive voice response designed for leading edge businesses.
The company delivers its services through its network management
system, which is accessible from virtually any telephone and can
communicate with PCs, fax machines, and pagers. They also offer
Web access and just announced a new deal with SUNW that should
help position them as the leader in this niche market.

May  12.50  TQO QV  Bid=0.63  OI=89  CB=11.87  ROI=16.24%

Chart = http://quote.yahoo.com/q?s=PTEK&d=3m
******************************************************************
PTVL - Preview Travel  $22.94     *** Summer Vacation! ***

Preview Travel operates a full-service travel agency & one-stop
shopping for a variety of travel services. It also operates AOL's
travel service, a co-branded travel Web site with Excite, and it
handles travel reservations for search engine Lycos. PTVL also
participates in several travel-related projects with other tour
and travel companies. Its News Travel Network syndicates news
to local TV stations and produces programming for broadcast,
cable, and in-flight markets.

May  17.50  QUT QW  Bid=0.81  OI=196  CB=16.69  ROI=15.01%

Chart = http://quote.yahoo.com/q?s=PTVL&d=3m
******************************************************************
VRIO - Verio  $62.88     *** Internet Speculation ***

Verio is a leading provider of Internet service with a host of
regional and local ISP's across the US. It owns or has majority
stakes in more than 35 business-oriented providers across the US.
Verio is increasing its business with direct lines to providers
and is marketing to more business and institutional subscribers.
Recent upgrades and support near the cost basis make this a very
favorable speculation play on a future Internet giant.

May  40.00  RLQ QH  Bid=1.56  OI=255  CB=38.44  ROI=11.04%

Chart = http://quote.yahoo.com/q?s=VRIO&d=3m
******************************************************************
XCED - X-Ceed  $18.50     *** Diversity Is The Key! ***

X-Ceed is a specialist in corporate services. Their subsidiary,
Journeycraft Performance Group provides performance improvement
and employee incentive programs, while its Journeycorp Division
provides corporate travel services. X-Ceed's TheraCom Medical
Communications subsidiary offers training and education programs
to health care professionals. Other divisions provide Internet
consulting and marketing services and they continue to produce
new offerings for niche markets in technology & business services.

May  15.00  XCU QV  Bid=0.56  OI=33  CB=14.44  ROI=12.61%

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




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