Option Investor
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Daily Newsletter, Tuesday, 11/09/1999

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The Option Investor Newsletter         Tuesday  11-9-99
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.
************************************************************
MARKET WRAP  (view in courier font for table alignment)
************************************************************
        11-9-99          High     Low     Volume   Advances Decline
DOW    10617.30 - 101.50 10765.60 10585.20   854,878k 1,306  1,707
Nasdaq  3125.04 -  18.93  3174.81  3099.22 1,467,758k 1,886  2,115
S&P-100  717.80 -   6.83   728.85   715.33    Totals  3,192  3,822
S&P-500 1365.28 -  11.73  1383.81  1361.45            45.5%  54.5%
$RUT     446.28 +   1.21   447.81   443.79
$TRAN   2989.41 -  41.80  3059.41  2980.15
VIX       23.07 +   1.55    23.54    21.34
Put/Call Ratio       .50
*************************************************************

On the eighth day they rested.

If you thought it would last forever you are smoking something
besides tobacco. The seven day record high winning streak by the
Nasdaq came to a halt and the Dow relaxed in sympathy. After a
strong opening with both indexes up at the open, the markets
began a slow bleed as profit taking slowly leveled the playing
field. The Dow leveled at just above 10600 and traded in a
narrow range the rest of the day. If you remember my chart from
Sunday, the two different methods of predicting the next critical
point both called for something a little over 10600.


 

Don't look now but we are there, 10617. The market has moved to
the exact point where the PPI numbers tomorrow will have the 
greatest impact. Bad numbers and we will fall out of our recent
trading range and possibly by a large number. Good numbers, +.1%
or less, should light a fire under the market as fear of another
Fed rate hike next Tuesday slowly evaporates. 


 

The Nasdaq just finally caved in under its own weight. Seven
days on the high road and +9% gains just proved to be too much
baggage to carry forward. But do not despair. The dip buyers
were out in force today. Even though the Nasdaq was down at the
close that was not the real story. Today was the heaviest volume
day in Nasdaq history with 1.448bln shares trading hands. Every
leader that dipped on selling by profit takers was met by strong
buying on every dip. Most recovered from the early morning sell
off by midday but some gave back some of their gains at the 
close in a final attempt to dodge the PPI bullet. I think you 
will agree this is not a weak chart! 


 

Without the mandatory day off today we had today, we would
have been handicapped on good numbers tomorrow. Now, with the
winning streak set back at zero we are free to rock and roll
if the PPI is in our favor. The bullish undercurrents are
boiling and it "seems" like nothing can stop us.

The driver for tomorrow, other than the PPI, will be the CSCO
earnings tonight. There had been rumors for weeks that Cisco
would miss earnings and the stock had been flat. Surprise! 
Cisco beat the street but only by a penny. This was enough 
for the after hours crowd and it traded up $2 to $3. The 
strong report will be positive for the market going into 
Dell's earnings on Thursday. 

Part of the high volume on the Nasdaq today was the Charter
IPO. Charter is Paul Allen's communication company. It looks
like everybody wanted a piece of it but nobody wanted to hold
it. Of the 170 mln shares in the IPO, 115 mln changed hands 
today. Hot potato anyone?

The week would not be complete without Amazon doing a 180
after we picked it as a play on Sunday. The last three times
we played Amazon it went exactly the opposite the next day.
Either Jeff Bezos is a psychic or just has really good timing.
On Monday he released a teaser press release to expect a 
major announcement on Tuesday morning. The rumors included
a buyout/linkup with Beyond.com to capture their software
business or a linkup with Home Depot to sell home improvement
items on their site. Neither happened. Jeff announced this
morning that they were going to sell software, video games
and tools?? They would open four new sites and continue the
Amazon tradition of losing money faster than anyone ever
expects. The tool connection turned out to be with a small 
company in Idaho. No mega merger equals no sex appeal. Bank
America promptly downgraded them and Merrill Lynch laughed
about their focus, "maybe they should stick to books and not
tools by mail". The stock dropped -7.19 but only gave back
half of yesterday's gains. We considered dropping it as a
put but the spiked looked like an entry point to us. Since
it jumped at the open on Monday it was highly unlikely that
anyone bought puts in amateur hour. This is still a high risk
play. You be the judge.


 

The PPI is expected to be only +.1%, very tame, and confirm
what the recent economic reports have been saying. The economy
is slowing and inflation is fading. The last PPI caused serious
grief when it came in much higher than expected. The Fed claims
to not put much emphasis on the PPI and considers it to be too
narrow an indicator. Lets hope it comes in low just to be on
the safe side. The next major events for the week will be the
Dell earnings on Thursday and the Retail Sales and Productivity
Reports on Friday and FOMC on Tuesday. With the calendar full
you would think the market will stay locked in its trading
range until at least Tuesday. The advance/decline line turned
south again this week with the profit taking and the VIX dipped
below 22 on Monday but closed at 23.07 today. With third qtr
earnings almost over the attention is being focused on the 
anticipated fourth quarter earnings. The Y2K quarter results.
As of today 124 companies have warned that the fourth quarter
will fall short of estimates. Not a flood but enough to make
us cautious about our long term outlook. Recently we have
seen year end rallies as investors expect the retail boom to
be reflected in the January earnings. If companies continue
to warn then the Y2K bug may get a last laugh in December.

After receiving all the hate mail on the Steve Brown article
on Microsoft this week and the Buzz Lynn market wrap on MSFT
last night, I would not want to be at the podium for the MSFT
shareholders meeting tomorrow. There are likely to be a lot of
pointed questions and angry people. It is not like they just
woke up yesterday and saw the newspaper and said "Oh my! What
has Bill done?" They knew the case was in process but they
did not know it would bite them. Bill is on record as saying
many times that "the trial would have no financial impact on
MSFT whatever". Of course, everybody believed him. I wonder if
he still feels that way? Either way, without a settlement it
will be well into 2001 before the case is over. I am a happy
camper this week after buying leaps on MSFT on Monday at fire
sale prices shortly after the open. I look at it this way. I
have at least four more earnings cycles and thirteen months
of covered calls to profit from this cash cow BEFORE the 
Justice Dept can get a single dollar from MSFT. Even if Bill
agrees to a breakup eventually the results should be good.
Remember the AT&T breakup, or the Standard Oil? Did the baby
bells turn profitable? Holding Exxon and Mobil would not have
been a bad deal either. Some of the children of these monopolies
grew bigger than the parents. From the hate mail there are a
lot of readers who hate MSFT with a passion. So be it. Feel
free to hate Mr Softee all YOU want, we still plan to profit 
from the stock! (we did switch to Unix mail servers this week
after repeated glitches in the Windows-NT servers. We may be 
slow, but we are not stupid!)

If the PPI gives us another buying opportunity try not to
buy too soon. The Fed is still ahead!

Jim Brown
Editor



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

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seminar this year. Don't procrastinate any longer. Lack of 
education is expensive in the options market. You can pay 
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Here is the only fall date remaining:

Nov 14/15 San Francisco

For complete details http://www.OptionInvestor.com/seminar/

There is a 100% money back guarantee and you can take a friend
for free. What else could you ask for?



**********
STOCK NEWS
**********

Is It Time to Join the Oil Rush?
By Cindy Christ

Gains in major oil stocks -- which gushed Monday after an OPEC 
heavyweight said producers might support continued cuts in 
global production -- slowed to a trickle Tuesday.

Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah said yesterday 
the 11-member group might consider extending worldwide crude 
oil supply cuts beyond their agreed upon expiration date in 
March 2000.


http://www.OptionInvestor.com/stocknews/110999_2.asp
****

Smokin' with Mirrors: Breakthrough Technology Routes Traffic 
at the Speed of Light

By Cindy Christ

Telecommunications equipment giant Lucent Technologies (LU) 
announced Tuesday it had developed breakthrough technology that 
can move the entire contents of a library across a fiber optic 
network in one second.

Using a series of tiny mirrors, the company's new all-optical 
router eliminates the need to convert signals in fiber optic 
networks to electrical form.

http://www.OptionInvestor.com/stocknews/110999_1.asp

****

Nortel Takes Aim at Cisco

By S.P. Brown

In an obvious attempt to steal some of rival Cisco Systems' 
(CSCO) quarterly earnings thunder, Nortel Networks (NT) 
announced its newest business strategy early this morning. 

Actually, NT announced a two-part strategy aimed at slowing 
the CSCO juggernaut.  

http://www.OptionInvestor.com/stocknews/110999_3.asp



***************
Market Posture
***************

As of Market Close - Tuesday, November 9, 1999 

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

DOW Industrials   10,750  11,320  10,617    BEARISH   9.23
SPX S&P 500        1,315   1,385   1,366    Neutral  10.29
OEX S&P 100          675     725     718    Neutral  10.28
RUT Russell 2000     425     450     446    Neutral  11.09  *
NDX NASD 100       2,320   2,520   2,764    BULLISH  10.28
MSH High Tech      1,120   1,250   1,411    BULLISH  10.28

XCI Hardware       1,000   1,095   1,080    Neutral  10.15
CWX Software         770     800   1,042    BULLISH   9.03
SOX Semiconductor    475     525     619    BULLISH  10.29
NWX Networking       550     615     690    BULLISH  10.28
INX Internet         495     525     540    BULLISH  11.05

BIX Banking          650     690     662    Neutral  10.28
XBD Brokerage        395     450     430    Neutral  10.28
IUX Insurance        610     650     637    Neutral  11.09  *

RLX Retail           875     910     886    Neutral  11.09  *
DRG Drug             375     390     393    BULLISH  11.04
HCX Healthcare       750     790     771    Neutral  11.09  *
XAL Airline          180     190     148    BEARISH   5.21
OIX Oil & Gas        285     305     294    Neutral  11.09  *

 
Posture Alert    

The Nasdaq continues to show great strength, but finally took a 
breather on Tuesday, closing down only -18. The Dow, however, 
continues to struggle at the 10,750 benchmark, even with the new
additions just made to that index. Sectors being upgraded to 
Neutral from Bearish include Insurance, Retail, Oil & Gas, and 
the Russell 2000. The only negative was the Healthcare sector, 
which was lowered to Neutral from Bullish. With this latest run by 
the market, the only sectors remaining on the Posture Board with 
a bearish undertone, are the Dow and Airlines.


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

/members/marketposture



****************
Market Sentiment 
****************

Tuesday, November 9, 1999

You Call That Profit Taking?

So the Nasdaq broke its streak of seven consecutive days of 
record-breaking highs! It was due for a sell-off, profit taking, 
or whatever everyone else in the media called it today. I don't 
know about you, but over the last 10 days, the Nasdaq is up over 
+325 points, so for it to be finally down, and down only -18, is 
called sweetness.

The market sentiment across the board for the last 10 days has 
been picking up dramatically, but many people missed numerous
opportunities to capitalize on some of the big gains that were 
achieved. We have witnessed many technology stocks making $50 to 
$100 gains these previous weeks (or even days), and people who 
miss out, want to get into the action.  We all wish that we had 
100 calls or 10,000 shares of Commerce One (CMRC) before it ran 
150 points last week, or Qualcomm (QCOM) which is up +90 during 
the last 10 days. When you combine the big gains that these stocks 
made, and the effects they have on people's trading psychology, 
the eventual outcome is fear or greed.

From a sentiment standpoint, we couldn't ask for better 
conditions. Investor's Intelligence is still highly bearish, and 
the fear/greed that is coming out of the woodwork is significantly
better than the blasť attitude that was witnessed several months 
ago. This combination forces investors to spend their cash 
reserves and money markets, which then fuels support and 
potential rallies for this market. 

Finally, pretend that you are a mutual fund manager for any kind 
of fund family out there. You still have large cash reserves that 
are now building with the recent up-tick in sentiment, and the 
market has gone through the roof. You've missed out on a lot of 
your favorite stocks. Your large bonus, future recognition, 
status, and job depend on your returns for the fund. You are also
trailing your peers as well as the major index averages. Now, are 
you going to spend that cash a little quicker with less than 40 
trading days until the end of the year? You bet you are. It's a 
race until the end of the year, and if no major economic hurdle is
thrown at us, you can bet it will be a nice finish!


BULLISH Signs: 

Short Interest:
Short interest for the Nasdaq is at an all-time high, and 
increased over 5% from the preceding month.

Bears have quick triggers:
After being beaten up for many years, bears are quick to 
run & hide, and will cover short positions in a flash.

Earnings: 
The results are in, with exception from a few stragglers, 
and the quarter ended up very solid.

Investor Intelligence:  
As a contrarian indicator, we may have witnessed the bottom in 
pessimism, and should this prove right, this market has a lot 
more upside in the months ahead.

Interest Rates:
The yield on the 30-yr Treasury is now safely off the 52-wk high, 
and is getting close to being under the 6% benchmark, which is a 
key psychological number.


Mixed Signs: 

Volatility Index:
The VIX continues to prove that 32-33 is a great buying 
opportunity, and also shows that the low 20's have been a good 
exit point. 

Advance/Decline Line:
The A/D line is showing signs of basing out.

BEARISH Signs: NONE


OTM Call Analysis

As we move closer to the November expiration cycle, Pinnacle is 
tracking the level of call buying (OTM) between 680-780 among 
option speculators. As we have been documenting, excessive out-of-
the-money (OTM) call may serve as overhead resistance.


November Expiration Cycle
OEX OTM Call Analysis (Open Interest November 680-780)
Date                 Open Interest     Change %    Alert

Friday, October 15        39,072          -
Friday, October 22        61,250       +56.8%
Friday, October 29        75,022       +92.0%
Friday, November 05       89,143      +128.1%


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.

 
OEX Pinnacle Index              Friday      Tues
Benchmark                       (11/5)     (11/9)

Overhead Resistance (720-740)     7.42       4.53

OEX Close                       718.80     718.32

Underlying Support (700-715)      0.87       1.15


What the Pinnacle Index is telling us:
Based on 11/9/1999, support is still light, and overhead 
resistance was heavy, and is on the decrease. Should the PI drop 
even further, this would suggest the OEX breaking out to the 
upside.


Put/Call Ratio                  Friday     Tues
Strike/Contracts                (11/5)    (11/9)

CBOE Total P/C Ratio             .69        .68    
CBOE Equity P/C Ratio            .40        .38
OEX P/C Ratio                   1.36       1.43


Peak Open Interest (OEX) Friday           Tues
Strike/Contracts         (11/5)          (11/9)

Puts                   670 / 10,889	 660 / 11,142
Calls                  740 / 8,772     740 /  9,798
Put/Call Ratio           1.24            1.14


Volatility Index    Major
Date                Turning Point       VIX

October 97          Bottom              54.60      
July 20, 1998       Top                 16.88         
October 8, 1998     Bottom              60.63
January 11, 1998    Top                 26.38
March 4, 1999       Bottom              28.15   
May 14, 1999        Top                 25.01 

July 16, 1999       Top                 18.13 
August  5, 1999     Bottom              32.12 

October 15, 1999    Bottom?             32.06

November 5, 1999                        23.07 


Investors Intelligence Major             Percent     Percent
Date                   Turning Point     Bullish     Bearish

October 97             Bottom            22.0        48.3       
July 20, 1998          Top               52.0        24.0         
October 8, 1998        Bottom            38.5        42.7
January 11, 1999       Top               58.3        30.0
March 4, 1999          Bottom            49.1        32.5

Oct. 13, 1999          Bottom?           39.2        37.5

November 4, 1999                         42.1        38.6



Please view this in COURIER 10 font for alignment
*****************************************************
CHANGES THIS WEEK

Daily Results

Index       Last    Mon     Tue   Week
Dow      10617.32  14.37 -101.53 -87.16
Nasdaq    3125.04  41.68  -18.93  22.75
$OEX       717.80   5.83   -6.83  -1.00
$SPX      1365.28   6.78  -11.73  -4.95
$RUT       446.28   2.66    1.21   3.87
$TRAN     2989.41  27.22  -41.80 -14.58
$VIX        23.07  -0.54    1.55   1.01

Calls               Mon     Tue   Week

VRTS       114.88   2.44    4.38   6.81  What can stop this bull?
BVSN        89.25   7.50   -1.75   5.75  BVSN posts huge volume
SNE        170.00   0.06    5.25   5.31  Pre-holiday spirit!
CMVT       118.69   7.25   -2.31   4.94  CMVT shows resilience!
LSCC        42.75   2.66    1.69   4.34  Couldn't wait to move
EMLX       186.44   1.13    2.69   3.81  Just keeps climbing
DISH        73.50   7.94   -4.50   3.44  New, a healthy DISH!
CNCX        32.13   0.88    2.25   3.13  New, buyout rumors 
SUNW       112.31   2.31    0.44   2.75  Another day in the sun
LVLT        73.44   1.44    0.88   2.31  A new and higher target
AAPL        89.63   8.06   -6.75   1.31  A chance to get on board
ASPT        32.44  -0.19    1.38   1.19  New, technically tidy
ADPT        50.50   1.38   -1.19   0.19  A buying opportunity
HD          80.00   1.13   -1.00   0.13  Nice intraday recovery
AOL        146.00   4.38   -4.38   0.00  The market giveth...
SYMC        49.50  -0.19   -0.19  -0.38  Could be a solid entry
NT          68.81   0.69   -1.69  -1.00  Cut costs to fight LU
SEBL       127.06   6.13   -7.31  -1.19  Dropped, split coming
KMB         64.25  -0.44   -0.81  -1.25  A slow and steady mover
MXIM        83.81  -0.63   -0.88  -1.50  Possible stock split?
INTC        80.06  -0.25   -2.06  -2.31  Time for a breather
SFA         59.44  -0.56   -2.25  -2.81  Board Meeting Wednesday
VSTR        93.88  -0.94   -2.19  -3.13  Another showdown for VSTR
IMNX        60.63  -0.94   -4.00  -4.94  Dropped, broke the 10-dma

Puts

NDB         32.19  -2.50   -0.56  -3.06  The downside of spikes
TXT         69.81   0.19   -2.75  -2.56  New, broke $70 support
BBY         48.50  -1.63   -0.50  -2.13  Weak sales fears
GT          37.06   0.69   -0.31   0.38  Trend is still lower
ALD         56.13   0.44    0.06   0.50  Dropped, stuck in mud
AMZN        70.81  13.06   -7.19   5.88  Rolled over today



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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         Tuesday  11-9-99  
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.


**************
TRADERS CORNER
**************

Nibbled to Death by Ducks

Today I was totally overwhelmed with activities, yet traded 
successfully anyway -- is there something worth learning here 
for traders? The more I thought about it, the more I found bits 
and pieces that I am sure our reader/ trader's can relate to. 
Today was a blur, as are many of our work lives. I woke up at 
6:15, and went to a job interview at a popular Silicon Valley 
breakfast spot. Steve Jurvetson, the venture capitalist who 
looks like a teenager, was holding court in a corner booth. 
After that, I dropped by my girlfriend's place, and settled 
in for some trading using my lap top with wireless modem.
Fortunately, I had loaded my plays from the weekend newsletter 
and developed my plan. I had some stuff to print out for class 
going into the final hour, and watched the market close from 
the back of a class. I read CSCO's earnings surprise while 
monitoring a discussion of negotiation tactics. 

Here are my trades. Last week, I entered a basket of the 
newsletter's call picks based on my belief that cash was 
coming back into the market. I had big gains on AOL, SEBL, 
and EMLX calls. I closed all of my open calls on Monday 
based on a belief that the NASDAQ could not continue higher 
after 7 straight gains. I opened a OEX Nov 725 Put position 
at 11.5 yesterday, which I sold today for a 15% profit. I 
started target shooting more call picks from the newsletter 
today, establishing call positions in LSCC, HD, SNE, BDVN, 
AAPL, AOL, and SUNW. Half are December positions, the other 
half are Novembers. Again, my comparative advantages are 
patience in target shooting and the newsletter picks. 

Next column: how can we train our significant others to support
us in the inevitable stresses and strains of option trading? 
If you have thoughts on this, email me. 

Good Luck!

Janar Wasito
janar@OptionInvestor.com



**************
BROKERS CORNER
**************

RISKING 2 1/2 TO GAIN 2 1/2 REQUIRES BROADER 
STOCKPICKING THAN INTEL, MICROSOFT, CISCO & DELL.

A FOLLOW-UP ON SPREADS

As with any option strategy, the entry point into a spread should 
be determined by positive or negative chart patterns, depending on
the direction of the stock you are expecting (of course).

When markets have been rallying for several days and appear to be 
at risk of being overextended but breadth and momentum remain good 
with robust volume, look for quality stocks with stable and steadily
advancing chart patterns that haven't participated in recent rallies
to the degree of the more widely known names.

In overbought markets, it's best, but not always possible, to find 
a spread that will pay you half of the difference between your 
strike prices. This way if the markets sharply reverse you'll be 
protected and limited to a smaller loss. In addition, the beauty 
of a spread lies in the time factor. In the event that the market 
went into a consolidation phase, you will have the luxury of waiting
until expiration for another rally to develop and allow your stock 
to advance.

If XYZ is trading at $50 and looks to be moving higher, look at the
$50 put. If you can buy it for $2 and sell the $55 put for $4 1/2, 
you have taken in $2 1/2 and risked the same, but most importantly, 
you have given yourself solid downside protection and the time 
needed for the stock to move higher after the markets have corrected.

This strategy is also a viable alternative for accounts that would 
like to sell puts but don't pass the margin requirements

These opportunities are often difficult to find, but they are 
out there. Call your broker. There is a good chance that he has 
uncovered ideas that others haven't.

L. Monty McCutcheon
Associate Vice President
Fahnestock & Co. Inc.

1-800-735-0993



****************
PICKS WE DROPPED
****************

When we drop a pick it doesn't mean we are recommending a sell
on that play. Many dropped picks go on to be very profitable.
We drop a pick because something happened to change its
profile. News, price, direction, etc. We drop it because we
don't want anyone else starting a new play at that time. 
We have hundreds of new readers with each issue who are
unfamiliar with the previous history for that pick and we
want them to look at any current pick as a valid play.


CALLS:
*****

IMNX $60.63 -4.00 (-4.94) We said the going could get a little 
tougher as shares of IMNX approached the $70 area.  An $8 
drop is not exactly what we had in mind.  After hitting $68.50
yesterday morning things began to unravel for the drug maker.
Even a reiteration of an accumulate rating from analysts at
Adam Harkness couldn't help IMNX.  A competitor, Hoechst AG
Germany's largest drug maker, received a warning from a European 
Union Scientific panel, to put a stronger warning label on a 
arthritis drug called Arava, to warn of its potentially 
dangerous side effects.  That's all it took to knock the legs 
out from underneath our call play on IMNX.  IMNX lost another
$4 today and at this point is headed lower closing below its
10-dma at $61.31.  Actually some of the decline could be profit-
taking as well but our play just plain isn't appealing any 
more.  IMNX did give us a chance to make a small profit before 
the decline set in.  For now we will look elsewhere. 

SEBL $127.06 -7.31 (-1.19) Ahead of the Stock Split that is
upcoming on Friday the shares of SEBL have gotten a little 
ahead of themselves on strong momentum that pushed the shares
to a new 52 week high of $139.44.  This was in the nose bleed
section, and after a strong market open the shares came 
tumbling down to close more than twelve points from the 
intra-day high backed by strong volume.  We choose to close
out the position at these levels and protect the gains that
have accumulated over the last three weeks.  With the record
date on Thursday and the uncertainty with the PPI numbers 
tomorrow, traders decided to take there profits off of the 
table when the upward momentum hit resistance today.  Looking 
at the technical picture, we see minor support at the $125 
level, and then the next level of support sits way down at 
$115.  We will reexamine the shares of SEBL after the 
probable post-split pull back.      


PUTS:
*****

ALD $56.13 +0.06 (+0.50) ALD has been stuck in $3 trading range
since October 28th.  We have been looking for ALD to make a
move in one direction or the other, preferably down but at 
this point it is still stuck.  Yesterday the Justice Department
cleared the way for AlliedSignal to purchase Honeywell in a 
$14.9 billion stock deal if the firms divest some of their 
avionics business.  Shares of ALD bounced up to $57.19 Monday
before falling back to $56.06.  Today it looked like our put
play may begin to finally come together as the conglomerate 
headed south only to stop dead in its tracks at $55.13, the
lower end of the recent range.  The balance of the day ALD,
headed back up only closing up $0.06 for the session.  The 
bottom line here is ALD may not be going anywhere, but 
primarily it's not going south which is the direction we 
needed it to go to remain a viable play.  ALD could be building 
a base in preparation for a move back up, for now we will let 
ALD go as we have outstayed our welcome. 



*****************
PICK NEWS - CALLS
*****************

CMVT $118.69 -2.31 (+4.94) And there goes CMVT right on queue!  
If you missed Jim's Options 101 article in Sunday's edition 
of the newsletter, he outlined many of the current plays and 
what they looked like heading into this week.  Jim showed the 
ascending bullish triangle that was forming on CMVT with the 
higher-lows.  Sure enough it broke out on Monday and ran to a 
high of $122.75 before the Nasdaq crumbled today.  Granted the 
market was due for a pullback and it gives us another entry on 
CMVT in case you missed the breakout yesterday.  After dipping 
to $114 Tuesday morning, CMVT found stronger support at $117.  
From here we will be watching the Nasdaq closely.  After seven 
record days, we want to see how much of a breather this market 
needs.  In general, we are happy with today's comeback and CMVT 
is showing lots of resilience.  Watch for the stronger volume 
to continue ahead of earnings on Nov 30th.   

EMLX $186.44 +2.69 (+3.81) Little by little EMLX is working 
it's why higher and by doing so adding value to our call 
options.  However, the actual closing price is deceptive of 
how the stock actually trading.  If timed right, traders were 
able to take home even higher profits.  On Monday, the stock 
traded at an intraday high of $95, which was almost twelve 
points higher than the actual closing price that day.  
Investors who follow this stock know volatile-trading sessions 
are everyday occurrences.  Today was no exception, however, 
EMLX held tough and managed to hold onto and impressive gain.  
This is another sign of how resilient the stock is and how 
investors will continue to buy as the shareholder meeting nears.  
November 18 is the big date, which is just around the corner.  
During this meeting, directors will announce the actual date 
for the 2:1 stock that was pre-announced back in October.  When 
placing trades, look for entry points around $180, which is 
the nearest support level for the stock.  During the last few 
trading sessions the stock retreated back to this level before 
heading to higher territory.  Resistance is at $95 or the new 
52-week high for the stock.  As the stock approaches these 
levels remember to increase your stops to protect gains.     

VRTS $114.88 +4.38 (+6.81) Not even a declining market was 
enough to stop this bull that has continued to charge forward 
in anticipation of the upcoming 3:2 stock split.  November 22 
is the day.  Traders have taken advantage of the opportunity 
the split run has provided and have been rewarded for doing 
so.  The stock is up 23 percent since we first initiated the 
recommendation to buy back on October 21.  These gains have 
been accompanied with increased volume, which is a good sign 
for near-term trading.  Expect to see a continued run to higher 
ground as the split date nears.  When placing new trades, 
investors should wait for intraday pullbacks in the stock.  A 
good entry point is tough to call as VRTS broke out of its 
current range today despite the market.  On an up day, this 
stock may be ready to roll.  The nearest resistance is today's 
new 52-week high at $115.50, let's see if the broader markets 
can make a U-turn tomorrow and help carry our play past this 
point.  Expect volatile conditions to continue as the split 
date nears, so remember, keep your stops in place just in case 
profit-takers step forward.  

SNE $170.00 +5.25 (+5.31) Once again SNE is breaking its way 
to high levels and leaving its competition in the dust.  As 
the holiday season nears, investors are anxious to buy the 
stock with hopes that they too will be able to enjoy a little 
of this pre-holiday spirit.  Today was a good example, SNE 
came out of the gates on fire and maintained its winning spirit 
throughout the entire trading session.  We expect this winning 
spirit to continue into the near-term as sales for the infamous 
Sony Play Station is projected to top $1 billion in sales over 
the holidays.  Backing its fundamentals is strong technical 
strength, which is obvious by looking at a recent chart of the 
stock.  SNE's stock price has increased 15 percent in the last 
two weeks.  These are some nice gains and provide reason to 
use caution when placing new trades.  There may be some light 
profit-taking, which will give us more buying opportunities.  
Of course, watch for a positive bounce prior to placing the 
trade.  The nearest established support is $160 or the stock's 
10-dma and the nearest resistance is today's new high of $170.88  
We anticipate the stock to continue its upward trend however, 
because we are at new highs, keep your stops in place to protect 
gains.  

AAPL $89.63 -6.75 (+1.31) Were you worried you had missed the 
boat too?  AAPL roared ahead yesterday, stopping just shy of 
$100 at $97.75.  It was the kind of move that makes you sick 
if you told yourself to buy calls first thing Monday and then 
didn't.  Fortunately, it is giving us another chance to come 
aboard.  The big news Monday was, of course, the defeat of 
MSFT in the monopoly battle.  All of the big names that have 
been working for a more level playing field against the software 
giant benefited from the announcement.  Apple also had some 
good news of their own when a court decided that the iMac 
clones made by Future Power would not be allowed in stores 
just yet.  It was ruled that the computers made by Future 
Power have too much of a resemblance to the iMacs.  The retreat 
in shares of AAPL today came as the Nasdaq took a break from 
the 7 record closing highs.  Now it is just up to the PPI due 
out tomorrow morning.  A good report to go along with CSCO's 
solid earnings after the close could have tech stocks rocking.  
Support is at $88 and resistance at $91.  Any move higher than 
$91 has a decent shot at $100.

LVLT $73.44 +0.88 (+2.31) There has been a nice rotation into 
the telecommunication stocks in the last few weeks.  To be
more specific the processing systems and products stocks like
Lucent, Plantronics, and LVLT.  The upgrades are coming in 
bundles on the street, as well as the price target increases.
Today USB Piper Jaffray reiterated there Strong Buy rating on
LVLT, and due to the three new customers that LVLT has recently
won, they increased there price target from $85 to $100.  From 
a technical standpoint we also remain bullish as the stock is 
holding onto its gains during the day and closing at the high 
end of the trading range.  The minor profit-taking seems to be 
over.  Today's close at $73.44 broke above the high end of the 
recent trading range which signals higher prices.  Protect this 
week's gains by using trailing stops and consider adding to 
current positions in a breakout above today's high of $73.88.  

ADPT $50.50 -1.19 (+0.19) Today the computer hardware stocks
overall slid in the trading session, although the news is 
still favorable, and has been favorable for the last few
trading days.  This round of profit-taking was inevitable
in these stocks.  Good news continued to hit the market, but
ahead of tomorrow's PPI numbers traders were taking some gains
off of the table.  In today's trading session ADPT traded as 
high as $52.50, before selling off to close at $50.50.  Stocks
like 3Com, Hewlett Packard, and Apple Computer in the sector 
were also down on the day  as well.  The price pattern and 
technicals remain consistent with our bullish outlook, and we 
will look at this pullback as a buying opportunity.  The stock 
currently sits right at last Friday's intraday high, we look 
for this support to hold up, and like the $51.69 level for 
another possible entry point.  If profit-taking continues, 
look for support at $49.50.

SUNW $112.31 +0.44 (+2.63) Sun Microsystems Inc unveils new
software products for the Internet today and continued their 
upward move.  This new software is a Java tool that will 
reduce the cost and time involved to create "dot-com" 
applications.  This news and the ongoing discussion of the 
Microsoft problems have only faired well for SUNW this week.  
The shares traded as high on Monday as $118.75, before pulling 
back to close the day at $111.81, today the stock traded as
high as $117.31, before closing the day at $112.31.  We warned
of the volatility that could be experienced in these shares, 
but it has been an aggressive traders dream, and has provided
numerous intraday opportunities to play the dips.  Going 
forward, look for more of the same price surges and retreats.
Keep in mind that SUNW has an upcoming stock split on 12/09.
The record date for the stock split is 11/11.  Use the major
pullbacks as entry points.  Current pullback support is at
the $111.50 level, look for a bounce off of this level for
a possible entry point.

MXIM $83.81 -0.88 (-1.50) We mentioned Sunday that MXIM was 
due for a pullback.  Monday shares of MXIM started the day 
higher.  After about 90 minutes into the trading day MXIM hit 
$87.63.  That's when the folks that have been buying MXIM 
decided they have a reasonable profit and decided to take some 
money off the table.  Actually MXIM has been trending higher 
since the middle of October when a share of the integrated 
circuit maker was going for about $62.  At this time we are 
pleased with MXIM as a call play having added over $7 since 
being selected for our play list.  If you entered a play on 
MXIM last week you have had a chance to make a profit.  We are 
keeping MXIM on our call list ahead of their shareholder 
meeting on Nov 18th.  We see a good possibility for a stock 
split.  The selling at this point has been fairly light and 
orderly, as there is not a mad rush to get out of the stock.
The support areas of $82, $80 and $78 we mentioned Sunday are
all still levels we could see MXIM hit and bounce off of which
would then be viewed as an opportunity to buy calls.  For now
be patient and let the market dictate our next move. 

SFA $59.44 -2.25 (-2.81) The scenario we described Sunday is 
beginning to play out.  After making a new high on Friday,
SFA has experienced the profit-taking early this week.  SFA 
fell to a low of $57.75 in the first 90 minutes of today's 
session penetrating the 10-dma at $58.16 but recovered to close 
at $59.44, down $2.25 for the day.  SFA released their 10-Q
report yesterday.  Basically sales were up and margins were 
better.  SFA will hold their annual stockholders meeting 
tomorrow and shareholders should be pleased with the past 
quarter's results.  We will keep our eye out for any news 
coming out of the meeting tomorrow that could enhance our play.  
For now we have had a retracement and will look for a bounce 
off the support levels for a chance to buy calls.  We have the 
PPI report in the morning so we will wait to see how traders 
digest that news as well, prior to considering a new play.  

INTC $80.06 -2.06 (-2.31) The semiconductor industry finally 
began to consolidate a bit today.  INTC began its consolidation
yesterday and continued to slip today.  INTC crept lower Monday
when the chip maker announced the availability of its new
Intel AnyPoint Phoneline Home Network.  The Intel AnyPoint 
family of products allows two or more people to surf the Web 
at the same time without the need for a second phone line or 
Internet account.  Today INTC lost $2.06 after they announced
they did not plan to stockpile inventory in the event of possible
Y2K related problems.  They said they see little or no Y2K
impact based on a study of business conditions, backlog and 
inventory, and felt no need to maintain a buffer of additional
finished goods inventory.  The decline this week really appears 
to be more technical in nature than anything else, as the
Nasdaq, Semiconductor stocks and Intel have reached a point
where some profit-taking or consolidation is due.  As long
as the retracement is orderly in nature we would look for a 
bounce off the $80 as an opportunity to buy calls.

BVSN $89.25 -1.75 (+5.75) Along with the overall NASDAQ market, 
BVSN's volume has been huge this week.  Even in today's round of 
profit-taking, volume was more than two times the ADV, which 
helped keep today's profit-taking loss in check.  The profit- 
taking was just flat overdue and there may be more to unwind 
given how far and fast this issue has moved.  However, as long 
as the volume keeps up, we look for more gains (yes, even though 
the price has risen from $59 in the last two weeks).  While we 
may see some caution in front of the FOMC on Nov 16th keeping 
the price in check, support this week has been at $87, then at 
$81, then $76 last week.  Resistance is at $96, its intraday 
high.  Do not buy at the current level - wait for a pullback to 
your targeted entry number based on your risk profile.  You can 
also scale into your position with three different orders, each 
with a lower target than the previous. 

NT $67.81 -1.69 (-1.00) Though eking out a small gain yesterday, 
like everything else, today was an overdue day for taking 
profits.  After today's gap open, then fall, NT's losses tapered 
as it found support at $67.50.  Given the overall volume of the 
market and the fact that NT volume is 33% above its ADV, we think 
the breather is temporary, though the FOMC meeting scheduled for 
November 16 may keep a lid on the action for the next few days.  
Nonetheless, dips are buyable at the current level if the market 
firms up.  The next support is $65, then $61.  Helping their 
competitive edge in the future, NT announced today that they are 
taking aim at Cisco and will slash the price of some routers by 
50%, undercutting CSCO's competing product by half.  In a related 
article from CBSMarketWatch, NT said they would license software 
to Intel for use in programmable network devices, and to 
Microsoft in it to-be-released Windows 2000 operating system.  
Bring on the royalty stream!  Choose your entry wisely and 
commensurate with your risk profile.

AOL $146 -4.38 (+0.00) The market giveth and the market taketh 
away, so therein lay the sum of "zero".  We need to be careful 
here with AOL.  While the close was well above the low of the 
day (a good sign), the volume was beginning to increase into 
the close as the price was falling, indicating there may be 
more room to fall.  Given the rise to current levels form $109 
on Oct 15th, we would not be surprised to see more profit-taking 
or at least a flattening out before the FOMC meeting on Nov 16th.  
Near-term support is in the $141-$142 range, where we had a 
strong bounce today and last Thursday.  Target shooting here 
will get the best entry; however, there are no guarantees since 
Internets are interest rate sensitive issues.  A PPI hiccup 
could upset the pattern rather quickly, especially this close 
to an FOMC meeting.  The next level of support is $132.  Not to 
worry, Mary Meeker, the Internet underwriting guru at Morgan 
Stanley Dean Witter noted that while there may be a shakeout 
in e-commerce businesses after the holidays, AOL has shown that 
it has a profitable plan that works, and will remain a survivor 
in any industry consolidation.  Funds love to hear those words 
and are inclined to put their money where they think it will 
be safe.  Gauge the market sentiment while looking for the 
bounce (confirm market direction) or target shoot your entries 
at support consistent with your risk profile.

VSTR $93.88 -2.19 (-3.13) VoiceStream opened down slightly 
on Monday and then a made a quick move up only to find 
resistance at $98.  VSTR headed down a bit and flirted with 
the $96 level before finally closing at $96.06.  VSTR opened 
up today and quickly headed south, making a bounce at $93 and 
settling in for yet another bout of buyers versus sellers, 
this time with the showdown holding right around $94.  We 
believe that the PPI report due out tomorrow before the open 
will most likely direct VSTR in trading.  If we get a positive 
report, we expect VSTR to rally with the market, in which case, 
the current level could serve as a solid entry point.  If the 
report is negative, VSTR still maintains support at it's 
10-dma of $92.50 and should VSTR violate this level, it may be 
time to exit this play.  VSTR said that they had successfully 
raised $1.5 billion in proceeds from its recent sale of 
senior discount and senior notes.  VSTR is using a portion 
of these proceeds to pay back an approximate $400 million 
principal amount of VSTR's 12% senior debentures due 2011.

LSCC $42.75 +1.69 (+4.34) LSCC couldn't wait to get out of 
the gates at the open this morning and quickly ran up to tag 
a new 52-week high of $45. LCSS then retreated a bit and held 
a rather tight trading range just above $43 for the majority 
of the day.  The PPI report is due out tomorrow before the 
open and if it is negative and causes the market to pull back, 
LSCC has some support at $40, strong support at $38 and if 
needed, additional support at it's 10-dma of $37.  If we see a 
positive report, LSCC could continue it's positive momentum run 
and easily break through resistance, which is it's new 52-week 
high.  If you are currently playing LSCC, it is important to 
raise your stops to protect your gains.  On Monday, LSCC 
announced its contribution to the Programmable Analog market.  
LSCC introduced its Programmable Analog Circuit monolithic 
ICs family, the ispPac (TM).  

HD $76.63 -2.50 (+0.13) It looked as though HD had a solid 
foundation heading into today as it held support at $78 in 
trading Monday and made a strong move up in afternoon trading 
to tag a new 52-week high and close just over $79.  Then 
Amazon had to come along on Tuesday morning and announce the 
opening of four new on-line "stores", one being a home 
improvement market.  Many investors were expecting Amazon.com 
to announce an alliance with Home Depot as a part of this deal 
and investors did not react well to the absence of Home Depot's 
name in the AMZN press release.  HD has also been feeling the 
pressure as of late because they have yet to roll out a site 
where customers can purchase their products on-line.  HD 
began to make a slow and steady recovery mid-day, and by the 
close had managed to make back most of what it had lost in 
morning trading.  It looks as though HD may very well be 
headed back into it's upward trend, and we think HD could 
easily break through resistance, which is currently the 52-week 
high of $79.44, particularly with earnings next Tuesday and a 
possible split announcement.  

KMB $64.25 -0.81 (-1.25) KMB shot up at the open, hit a new 52 
week high and then spent the rest of the day pulling back.  Use 
caution with this play!  This is a slow and seemingly steady 
mover and the trend shows the possibility of a rollover.  We 
want to see a bounce and a definite move toward a break through 
of the 52-week high before entering a new play.  KMB is currently 
trading at the 5-dma and is just over $1 above the 10-dma at $63.  
If we see a bounce followed by the return of positive momentum 
at either of these levels, this could be a nice entry point.  
The PPI report will most likely be a factor in the near term 
direction of KMB so be sure to take that into account also.

SYMC $49.50 -0.19 (-0.38) SYMC had a somewhat blah day with a 
trading range of only $0.75.  Many are pointing to tomorrow's 
pending PPI report, which is due out before the open, as the 
reason for some "timid" investing so far this week.  A good 
entry has been somewhat difficult to come by as of late being 
that SYMC has been consistently hitting new highs, so depending 
upon the report tomorrow, this brief decline could be just the 
break we were hoping for to make a new entry more palatable.  
If we see a positive report tomorrow, we expect that SYMC will
participate whole-heartedly in the rally and could easily break 
through resistance, which is currently at $51.31.  If the 
report is negative, SYMC could continue to pullback.  SYMC has 
support at it's 10-dma of $48, which again, if we see a bounce 
and a reclamation of positive momentum, may serve as a 
solid entry.  Either way, we are still optimistic in regards 
to the future of SYMC.  On Monday, SYMC announced that they 
had entered into a relationship with On The Go Software and 
have developed an add-on, which will enable the sharing of data 
between ACT! and Quicken ExpensAble.  This feature will help 
to simplify the tracking of expenses. 



****************
PICK NEWS - PUTS
****************

NDB $32.19 -0.56 (-3.06) Everything is going as planned.  We 
originally recommended NDB as a put play because of a spike in 
the stock price on Friday.  If history was any indication of 
the future, we knew this move was going to be a short-lived.  
Apparently investors were quick to realize this too, shares 
of NDB were quickly sold on Monday and continue to be sold in 
today's trading session.  The stock is down 10 percent since we 
initiated the play on Sunday, which is a healthy return by any 
traders' standards.  We expect the selling to continue as 
investors drive prices of the stock back down to levels near 
it's closest support of $22-$25.  Current trading levels would 
be good entry points but remember to confirm negative momentum 
first.  The nearest resistance level is $35, which was the 
turning point for the stock on Monday.  In the news, NDB 
suffered technical problems for about three hours on Monday, 
leaving customers angry and frustrated about slow execution 
of online trades.  This is just one more reason for current 
investors to dump the stock (if they can get online, that is). 

BBY $48.63 -0.38 (-2.13) It was reported today that U.S. 
retailers are enjoying their strongest stretch of sales
gains in at least a decade, and as we approach the Christmas 
season the retailer's are poised to benefit from one extra 
shopping day between Thanksgiving and Christmas compared with 
last season.  Wal-Mart came in with positive earnings today, 
but the shares sold off due too a forecast for sales to slow 
in January.  It seems that this is the overall story for the 
retail sector and specifically BBY.  The positive news continues 
to flow, but the positive news is old news.  The street is 
looking for future earnings and they are skeptical.  That is 
why BBY has continued to slide this week, hitting an intraday 
low today of $45.88.  We were looking for an entry point on 
Monday at the $50 level and the downtrend continued and provided 
us with a trading opportunity as forecasted.  Aggressive traders 
have had a nice two day run and should protect profits at these
levels.  Going forward the shares sit slightly above another 
possible trading entry point of $48.50.  Trading through this 
level should retest the lows of today at $46. 

GT $37.06 -0.31 (+0.38) We'd cautioned that there might be some 
strength in GT if the overall market headed south, prompting 
investors to start looking for some "bargains".  Sure enough, GT 
gave us a little spike to $38.06 before plateauing $37.50, 
followed by a fade at today's close to $38.06, it's low of the 
day - the trend is still down and the volume is still up.  It 
looked like a put buying opportunity to us at the close.  There 
is no news.  Technical chart is negative on all counts.  We look 
for the downward trend to continue, as it appears index funds are 
not finished selling this issue yet.  Careful - mild intraday 
support is at $35.69.  Real support at $35.  A break south from 
there would set up GT for the next stop at $32, where it has 
strong support.  Tighten up the stops in case GT becomes 
irresistible to the "value" crowd (p/e = 19), thus stabilizing 
and perhaps elevating the price.  It can't fall forever, but 
doesn't appear to have a grip yet.

AMZN $70.81 -7.19 (+5.88) He fakes right and goes left, or so 
it seemed with investors anticipation yesterday of a big 
announcement from AMZN this morning.  Honestly folks, we didn't 
plan to have Jeff Bezos make a price-moving announcement the 
morning after we picked AMZN as a put.  (He really should be 
calling us before he announces news that will affect the play.)  
That's why we frequently note: "Don't buy the morning after a 
news letter" and "confirm market direction".  The technicals are 
still negative and there are still cracks in AMZN's foundation.  
What was presumed to be a great forthcoming story of perhaps 
a synergistic acquisition (beyond.com?) became just another 
announcement of the addition of new stores to its Web site.  
While certainly not chopped liver, the announcement of the 
addition of home improvement, software, video games, and gift 
ideas was somewhat of a letdown to investors who expected 
more.  Did investors really send AMZN down over $7 (albeit on 
yesterday's $13 gain) because they liked the news.  Of course 
not.  Don't get us wrong, we love AMZN's brand strength and 
their ability to leverage and grow legions of loyal customers 
from their sites, but some day, they'll need to show a profit.  
That's what has investors so flustered.  The fundamentals haven't 
changed.  The news has simply given us a better entry.  As volume 
increased into the close, $70 is looking like it will come 
under pressure tomorrow.  Confirm the break south of $70 
before entering.



**************
NEW CALL PLAYS 
**************

DISH - EchoStar Communications $73.50 -4.50 (+3.44 this week)

Located in Littleton, Co is the second-largest provider of
satellite broadcasting.  EchoStar operates the DISH Network
and offers more than 300 channels of digital TV and audio
programming.  They have over 2.4 million subscribers and also
provide satellite delivery of local network stations in several
large markets.  DISH has formed a partnership with Microsoft 
to provide WebTV access through its DBS system.  They compete 
with industry heavy-weights DIRECTV, Time Warner, and AT&T 
Broadband & Internet Services.

We welcome DISH back to our play list tonight.  Dish split 2:1
the last week of October and we have seen no post split depression
from the broadcasting company.  As a matter of fact DISH made 
a new split adjusted 52 week high today at $80.  The investing
public has had their eye on DISH even thought they missed earnings
earlier this month by about 14.5 percent.  Several analysts have
given DISH a vote of approval as well reiterating Buy and 
Accumulate ratings.  So what makes DISH so attractive now? 
Besides the fact their chart looks great and its been climbing
virtually everyday since the split and setting a new high, there
is this piece of legislation in Washington concerning satellite
TV reform.  Under an compromise reached yesterday Lawmakers from
the House of Representatives and Senate agreed on legislation to
allow satellite firms to carry programming from local TV stations. 
The bill should level the playing field for cable and satellite
dish companies, and could lead to lower cable bills for all 
consumers.  Shares of DISH jumped over $7 yesterday in 
anticipation of the agreement.  Today we saw some profit-taking 
come in after DISH hit $80.  We would look for some consolidation
in the price of DISH stock.  The area between $70 and $72 should
provide support.  In considering a new play in DISH look for a 
bounce off the support levels prior to entering a play.  

In other news even though DISH missed earnings, the pending
legislation and the prospects for DISH to remain healthy
in the near-term and long-term Merrill Lynch reiterated 
Buy and Accumulate ratings on DISH last Thursday. 

***November strikes expire in less than 2 weeks***

BUY CALL NOV-65 UAB-KM OI=1327 at $ 9.75 SL=7.25
BUY CALL NOV-70*UAB-KN OI= 605 at $ 6.38 SL=4.75
BUY CALL NOV-75 UAB-KO OI= 167 at $ 3.75 SL=2.00
BUY CALL DEC-70 UAB-LN OI= 465 at $10.00 SL=7.50
BUY CALL DEC-75 UAB-LO OI= 512 at $ 7.63 SL=5.75

Picked on Nov 9th at     $73.50    P/E = N/A
Change since picked       +0.00    52-week high=$80.00
Analysts Ratings      9-7-1-0-0    52-week low =$ 7.38
Last earnings 11/99   est=-0.48    actual=-0.55 surprise -14.5%
Next earnings 03-17   est=-0.57    versus=-0.67
Average daily volume = 1.03 mln
Chart = http://quote.yahoo.com/q?s=DISH&d=3m

****

ASPT - Aspect Communications $32.44 +1.38 (+1.38 this week)

Need customer service management software for your data or call 
center?  Then Aspect has your number.  In addition to automatic 
call routing, voice mail, e-mail, fax and Web integration 
software, they also provide consulting, project management, 
and integration services.

Since October 1, ASPT stock has nearly doubled, setting new 
highs along the way - today included.  Frankly, we can't find 
a story here, but we can find a tidy looking technical chart 
showing a steady ascent from the mid-teens over the last month.  
Over that period, volume has been running in waves from minus 
40% to plus 60% of its ADV (869K).  It looks like its beginning 
to cycle up again on the volume, with support at $32 in the 
ascending channel.  Based on the trend, ASPT has moved up, 
seemingly impervious to market influences.  It shows strength 
on up and down days.  We can find pretty good support at $31, 
and $30 as well on a near-term historical basis.  These levels 
look buyable as a place to target shoot.  SoundView upgraded 
the issue to a Strong Buy last Friday, however their price target 
isn't known.  Wish we had more.  But in this case, "the trend is 
your friend"; we'll play it while we can and search for any 
hidden catalysts.

In the news, AT&T broadband, and Cellular One have recently 
signed on to use ASPT's customer management Web solution portals.  
ASPT was selected over Lucent technologies, which is known in 
the industry for its cozy relationship with AT&T (it's a parent 
and child thing).  To beat out Lucent, they've got to have a 
better mousetrap, better price structure, or both.

***November strikes expire in less than 2 weeks***

BUY CALL NOV-25 ATQ-KE OI=4233 at $8.00 SL=6.25
BUY CALL NOV-30 ATQ-KF OI= 264 at $3.75 SL=2.00
BUY CALL DEC-30 ATQ-LF OI= 182 at $5.13 SL=3.25
BUY CALL DEC-35*ATQ-LG OI= 105 at $2.81 SL=1.50

Picked on Nov 9th at   $32.44     P/E = N/A
Change since picked     +0.00     52-week high=$32.75
Analysts Ratings   0-11-1-0-0     52-week low =$ 6.00
Last earnings 10/99 est=-0.21     actual= 0.00 surprise = 100%
Next earnings 01-19 est=-0.08     versus= 0.11
Average Daily Volume =  869 K
Chart = http://quote.yahoo.com/q?s=ASPT&d=3m

****

CNCX - Concentric Network Corp $32.13 +2.25 (+3.13 this week)

Concentric Network Corporation provides complete, easy-to-use
Internet business solutions for small to medium sized 
companies and customized Virtual Private Network and data 
center services for larger organizations.  Concentric's
portfolio of services for small to medium sized companies
includes high-speed DSL access, Web hosting and e-commerce.
For larger enterprises, the company offers dedicated Web
hosting and data center services.

Internet stocks were up on the open of trading today, but
started to sell off across the board after the early 
reports coming from Amazon were not enough to push the 
stocks in the sector higher, the early morning momentum
fizzled out.  As a group the smaller ISP's have started to 
bounce back to life.  This group which includes CNCX have 
lagged the overall Net index since August.  The ISP's are 
seeing renewed enthusiasm as the demand for Web hosting 
bandwidth has resurfaced.  VRIO, ELNK, and CNCX all ended 
the day up.  CNCX specifically ended the day up over 2 points 
on very strong volume.  The shares are trading up on the back 
of takeover rumors and positive news.  With the new monthly
high being reached today at $32.63, and the stock closing
near the high at $32.13 at the high end of the intraday
range, backed by strong volume and momentum, we expect to
see higher prices over the short-term.  Look for a possible
entry point above $32.75 backed by the confirmation of strong
volume and price surges similar to today.  Pullback's to 
support at the $29 level is also a possible entry point. 

In the news today CNCX reported that it will offer Microsoft's 
office 2000 over the internet to customers.  CNCX and Microsoft 
are leading the industry trend of making software applications 
available on a subscription basis from central data centers.

***November strikes expire in less than 2 weeks***

BUY CALL NOV-30 QXF-KF OI=1646 at $3.50 SL=1.75
BUY CALL NOV-35 QXF-KG OI=  80 at $1.19 SL=0.00 High Risk!
BUY CALL DEC-30*QXF-LF OI= 628 at $5.50 SL=3.75
BUY CALL DEC-35 QXF-LG OI=  90 at $3.25 SL=1.63

Picked on Nov 9th  at    $32.13    P/E = N/A
Change since picked       +0.00    52-week high=$57.31
Analyst Ratings       5-6-2-0-0    52-week low =$10.69
Last earnings 10/29   est=-0.69    actual=-0.65
Next earnings 01-25   est=-0.69    versus=-0.85
Average daily volume = 1.34 mln 
Chart = http://quote.yahoo.com/q?s=CNCX&d=3m


*************
NEW PUT PLAYS 
*************

TXT - Textron Inc $69.81 -2.75 (-2.56 this week)

Textron is a diversified company that operates in the Aircraft, 
Automotive, Industrial and Finance sectors.  Their aircraft 
business makes Cessna aircraft and Bell helicopters.  Their 
automotive business makes trim products, fuel systems and 
components.  Their industrial group makes fasteners, golf 
carts and lawn products.  Their finance division finances 
commercial equipment lease-loans.  They do business around 
the world but the U.S. still accounts for 65% of sales.

There is no rest for the weary.  TXT keeps sliding to lower 
levels and we expect more downside ahead.  This is what happens 
to your stock when you beat estimates by a penny and you 
have no real hopes for the future.  The highlight of Q3 that 
was reported on Oct 19th seems to be a new "Textron Quality 
Management" program that they HOPE will improve profitability.  
Wow, that sounds reassuring, doesn't it?  As we said above, 
they did beat First Call by $0.01 when they reported a $0.95 
per share profit.  This pushed TXT up the 50-dma and it
rolled over once again.  The overall pattern has been headed 
lower since May but today's close under long-term support 
of $70 is very bearish.  Tomorrow will be a telling day for 
the shares of Textron.  If they don't get a surge of buyers 
on nice volume to bump them back over $70, this trend will 
likely be sustainable for awhile.  We mentioned that $70 has 
been long-time support.  Well, usually when a stock hits a 
firm support level it will bounce.  A look at today's intraday 
chart shows no such bounce.  It fell from $72.50 in the 
morning, flattened out at $70 for the afternoon and pushed 
through $70 near the close and on above average volume.  In 
other words, no bounce.  We want to confirm the trend tomorrow 
before jumping in.  The next technical support level is $60.    

BUY PUT NOV-75 TXT-WO OI=110 at $5.38 SL=3.75
BUY PUT DEC-75 TXT-XO OI= 33 at $6.25 SL=4.25

Average Daily Volume = 382 K
Chart = http://quote.yahoo.com/q?s=TXT&d=3m



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









The Option Investor Newsletter         Tuesday  11-9-99  
Copyright 1999, All rights reserved. 
Redistribution in any form strictly prohibited.


***************
PLAY OF THE DAY
***************

VRTS - Veritas Software $114.88 +4.38 (+6.81 this week)

Veritas Software is the industry's leading enterprise-class 
application storage management software provider.  They 
furnish storage management software for protection against 
data loss and file corruption, efficient file processing and 
network back-up.  Veritas (Latin for "truth") has made its 
name by partnering with such technological heavyweights as 
Hewlett-Packard (HWP), Microsoft (MSFT), and Sun Microsystems 
(SUNW), all of which have licensed and embedded Veritas 
products in their operating systems.  Its purchase of the 
network and storage management software group of the disk 
drive maker, Seagate Technology (SEG), doubled Veritas size 
and gave Seagate a 35% stake in the company.

Sunday's Write Up

We originally chose VRTS as a call play because the company 
announced a 3:2 stock split, which will take place on Nov 22nd. 
It's been a nice ride however, the stock has slightly stalled.  
On Friday VRTS followed the heels of the broader markets as 
they rallied behind mild unemployment figures, unfortunately, 
the afternoon profit-taking on VRTS was a little more extreme 
than the broader markets.  The stock gapped almost 5 points 
at the open but profit-takers took control, leaving VRTS 
fractionally lower for the day.  This week's change for our 
split play is very deceiving as to how the stock has really 
performed.  If you were lucky enough, investors were able to 
buy at the close of each trading session and sell at the opening.  
This was the trend last week, which would have provided some 
nice profits for those lucky investors.  However, trades like 
these are not for the light hearted and should be left for more 
aggressive investors.  For less aggressive investors, watch for 
pullbacks near $105, the stock has held support at this level 
quite well.  The nearest resistance is $113, which is the high 
for VRTS and was established during Friday's trading session.  
As the split day nears we expect to see the stock set more highs.       

On Friday VRTS announced record-breaking attendance at its 
third-annual worldwide user's conference in Anaheim, Calif.  
Attendees the opportunity to participate in pre-conference 
tutorials and attend presentations by VERITAS Software 
customers, executives and product managers.  There was no 
other news to report at this time.

Tuesday's Write Up

Not even a declining market was enough to stop this bull that 
has continued to charge forward in anticipation of the upcoming 
3:2 stock split.  November 22 is the day.  Traders have taken 
advantage of the opportunity the split run has provided and 
have been rewarded for doing so.  The stock is up 23 percent 
since we first initiated the recommendation to buy back on 
October 21.  These gains have been accompanied with increased 
volume, which is a good sign for near-term trading.  Expect to 
see a continued run to higher ground as the split date nears.  
When placing new trades, investors should wait for intraday 
pullbacks in the stock.  A good entry point is tough to call 
as VRTS broke out of its current range today despite the market.  
On an up day, this stock may be ready to roll.  The nearest 
resistance is today's new 52-week high at $115.50, let's see if 
the broader markets can make a U-turn tomorrow and help carry 
our play past this point.  Expect volatile conditions to 
continue as the split date nears, so remember, keep your stops 
in place just in case profit-takers step forward.  

***Caution: only 2 weeks left for November options***

BUY CALL NOV-105 UQJ-KA OI=193 at $11.75 SL= 9.25
BUY CALL NOV-110*UQJ-KB OI=530 at $ 8.50 SL= 6.50
BUY CALL NOV-115 UQJ-KC OI=223 at $ 5.63 SL= 3.75
BUY CALL DEC-105 UQJ-LA OI=136 at $15.88 SL=12.00
BUY CALL DEC-110 UQJ-LB OI=295 at $12.88 SL=10.25

Picked on Oct 21st at  $92.94     P/E = N/A
Change since picked    +21.94     52 week high=$115.50             
Analysts Ratings   5-13-2-0-0     52 week low =$ 24.25                
Last earning 10/14  est= 0.17     actual= 0.21                            
Next earning 01/28  est= 0.27     versus= 0.12                            
Average Daily Volume =  500 K 
Chart = http://quote.yahoo.com/q?s=VRTS&d=3m



************************
SPREADS\STRADDLES\COMBOS
************************

Stocks Fall As The Day Of Reckoning Approaches..

Monday, November 8

Stocks moved higher Monday and the Nasdaq climbed to a new record
as investors continued to buy technology issues, even in the wake
of the Microsoft ruling. The Dow Jones Industrial Average closed
up 14 points at 10,718 and the Nasdaq composite finished up 41
points at 3,143. The S&P 500 index ended 6 points higher at 1,377.
Declines outpaced advances 1,697 to 1,350 on active volume of 802
million shares on the NYSE. The 30-year U.S. Treasury bond closed
flat with the yield at Friday's finish of 6.06%.

Sunday's new plays (positions/opening prices/strategy):

Nvidia          NVDA   DEC20C/DEC25C   $3.50   debit   bull-call
Youthstream     NETS   FEB22C/NOV25C   $4.62   debit   diagonal
QLT PhotoTher.  QLTI   NOV47C/NOV45C   $0.25   credit  bear-call

All three of our new plays provided favorable entry opportunities
during the session. NVDA fell $1.75 at the open, allowing an easy
entry at the target price and the stock recovered to finish $0.81
higher at the end of the day. NETS was relatively unchanged in
the morning but slid lower in the afternoon, offering our target
entry near the close of the session. QLTI was the only borderline
issue with our bearish credit spread trading from $0.12 to $0.31, depending on when (and how) you opened the position. We recorded
the initial credit as $0.25 and will watch the spread price for
another opportunity at $0.31 in the next few days.

Portfolio plays:

Microsoft (MSFT) was one the most active issues in the market as
more than 121 million shares traded during the session. The stock
dropped almost $8 in early trading but fought back to close near
$90, a small ($1.62) loss for the day. In a ruling released late
Friday, a federal judge found that Microsoft had used its power
to unfairly punish competitors. The news startled investors but
they soon decided that what may be bad for Microsoft may be good
for the company's competitors and the software/personal computer
market in general. Analysts say there is now tremendous appetite
for equities and the effects of the MSFT judgment may be ignored
as the outcome was already priced into the market. Investors are
also waiting for the release of the Producer Price Index, which
gauges inflationary pressures at a wholesale level. The figures
due on Wednesday, will help the Federal Reserve make a decision
about its interest rate policy when the committee meets on the
16th of November. A number of analysts are predicting there will
not be an interest-rate hike at the meeting.

Our portfolio had some favorable activity today and one of the
best performing issues was Excite@Home (ATHM), up almost $6 to
a recent high near $45. The move came on the rally in Internet
issues and speculation that a new merger/acquisition may be in
the works. Both of our bullish spreads benefited from the move
and we will look for favorable exit opportunities as the stock
moves higher. Many of our technology issues moved up during the
session and communications stocks led that group. Aware (AWRE),
Bell Atlantic (BEL), Cisco Systems (CSCO) and 3Com (COMS) were
the best performers. Internet brokerage Etrade Group (EGRP) is
still on the move, rallying another $1.25 to $32. Our diagonal
position is now ITM and you should consider closing the play for
a favorable profit. EGRP's move also propelled Netbank (NTBK) to
a recent high near $27. This bullish position is also a great
candidate for early exit as the sold option is now $2 ITM.

Smaller-cap stocks were less than outstanding today but we did
have some positive issues in the group. One of our older plays,
Network Associates (NETA) moved up $0.75 to a recent high above
$20. The bullish (December) debit spread is now $3 ITM and can
be closed for a favorable profit. Apollo Group (APOL) climbed
$1.12 to $25.75 and that position is also deep ITM with a small
profit for early exit. Occidental Petroleum (OXY) rose $1 with
the rebounding oil stocks. The neutral calendar spread on that
that issue has been one of the best performing positions in the
Spreads/Combos portfolio and it is now trading at $0.88 credit.

In our long-term section, Exxon (XON) was the leader, up $3.93
at $74.31 as energy shares soared amid favorable outlooks for
the sector. The industry expects higher oil prices on support
from oil producers that are now planning to extend global supply
cuts. Our LEAPS/CC's play moved back to profitable territory on
the rally. Other stocks in that portfolio that continued to move
higher include Cabletron (CS), Sun Micro (SUNW), Solectron (SLR)
and General Motors (GM). Motorola (MOT), Johnson & Johnson (JNJ)
and Medtronics (MDT) all consolidated after recent gains. Most
of the positions in this section are now profitable and we have
favorable expectations for Polaroid (PRD) and The Limited (LTD)
in the long-term.


Tuesday, November 9

U.S. Markets slumped Tuesday as investors sold for profits after
the recent rally in technology stocks. The Dow Jones Industrial
Average closed down 101 points at 10,617 and the Nasdaq fell 19
points to 3,124, on the most active day ever for the index with
1.46 	billion shares traded. The S&P 500 index slipped 11 points
to 1,365. In the broader market, decliners outpaced advances 17
to 13 on active volume of 851 million shares on the NYSE. There
were 75 stocks at new highs and 100 at new lows. The long bond
was down 9/32 with its yield at 6.07%.

Portfolio plays:

Even in the midst of today's consolidation, we had some excellent
performances by technology issues. Cisco Systems (CSCO) moved up
to a midday high of $77 before traders exited the issue in a big
pre-earnings sell-off. The networking company will report after
the market closes and is expected to post a first-quarter profit
of $0.23 a share, up from $0.17 a share last year. Analysts also
foresee a 35% gain in first-quarter earnings per share thanks to
booming sales of its phone, wireless and cable products. Our new
bullish diagonal spread traded as high as $9.00 credit, a $0.75
profit for the one week play. Network Associates (NETA) continued
to rally, up another $1.50 to a new high near $22. Our December
debit spread traded at $4.50 credit, an $0.88 profit, during the
session. 3Com (COMS) moved higher today, up $1.12 after another
favorable report on CNBC and speculation of a new spin-off of the
Palm-pilot division. Our current diagonal spread is deep ITM (and
very profitable) but we may be able to increase the return with
the rising call-option interest. The Excite@Home (ATHM) rally is
at full strength and we expect a favorable exit on both bullish
plays in the next few days.

In the smaller cap issues, 3dfx (TDFX), Anesta (NSTA) and Data
Broadcasting (DBCC) all made solid moves and rumored takeover
candidate Coyote (CYOE) rebounded $0.25 to finish just below $7.
The short-term diagonal spread is now in profitable territory.
On the down side, online troubles plagued Toys-R-Us (TOY) for a
second straight day as customers overwhelmed the site's servers.
Officials said the site received a sharp increase in the number
of visitors this week, as consumers responded to advertisements
in national newspapers around the country. The site slowdown is
the latest in a series of Web-related problems the company has
encountered and although our January position is not in danger,
we will monitor the issue closely.

Those of you participating in the QLT PhotoTherapeutics (QLTI)
play had another chance today as the stock rallied early in the
day to a high near $37, offering a credit of $0.31 for the short
term (bear-call) spread position. The issue fell later in the
session to a low of $32 but finished almost unchanged at $34.50.

Questions & comments on spreads/combos to ray@OptionInvestor.com


MERGER/TAKEOVER PLAYS

These plays are based on speculation of acquisitions/mergers or
other unique events for the candidates. Whether the rumors have substance is not the issue, we simply favor the recent technical
history or trends and the higher probability of profit in many
of these positions due to premium disparities in option pricing.
News and market sentiment will have an effect on these plays so
review each one individually and make your own decision about the
future outcome of the stock price.

****

COMS - 3Com Corporation  $31.50   *** New Speculation ***

3Com has evolved from a supplier of discrete networking products
to a broad-based supplier of local area network (LAN) and wide
area network (WAN) systems for the enterprise, small business,
home, and service provider markets. Following its recent merger
with U.S. Robotics, the world's leading provider of modems and
remote access products, 3Com offers customers a broad range of
data networking solutions that include routers, hubs, remote
access systems, switches, adapters, modems, organizers and other
telephony products.

As we said in today's narrative, COMS has moved higher recently
on a solid rally in the sector and numerous rumors including; a
possible deal with a broadband company and the speculation of a
new IPO for the Palm-Pilot division. Today an analyst on CNBC,
Jack Cunningham of Solomon Investors Fund, named the company as
one of his top three picks in the industry and it appears that
traders agree as the stock volume and call option interest has
increased significantly in the short-term.

We follow this issue regularly and feel confident that the new
breakout on heavy volume and rising institutional interest is
a step-up to the next trading range. A small premium disparity
in option pricing will allow us to enter the play at a discount.

PLAY (aggressive - bullish/debit spread):

BUY  CALL JAN-30.00 THQ-AF OI=13441 A=$3.88
SELL CALL JAN-32.50 THQ-AZ OI=4957  B=$2.56
INITIAL NET DEBIT TARGET=$1.12 ROI(max)=123%

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

****

MTC - Monsanto  $44.38     *** Implied Volatility Skew ***

Monsanto and its subsidiaries engage in the worldwide manufacture
and sale of a diversified line of agricultural products including
pharmaceuticals, food ingredients, and chemical products. Their
products are sold directly to customers in various industries, to
wholesalers and other distributors and jobbers, to retailers and
to the ultimate consumer.

The rally started last week and today the stock gained another
$0.75 to close above $44 after a Wall Street Journal report said
the company was in talks with Novartis AG about a sale of all or
part of its businesses. Officials from both companies declined to
comment on a possible merger. Analysts say Monsanto, which makes
the herbicide Roundup and genetically modified seeds, is under
pressure to rescue its slumping stock price, through the sale of
a division or the entire company. Novartis is eager to boost its
drug offerings and a merger would bring new funding to Monsanto,
which fell into debt after spending billions to acquire new seed
companies over the last few years.

This position is based on a disparity in the front-month implied volatility of the call options and the recent technical breakout
to an old trading range near $46-$48.

PLAY (very aggressive - bullish/calendar spread):

BUY  CALL JAN-50 MTC-AJ OI=7662 A=$2.19
SELL CALL NOV-50 MTC-KJ OI=80   B=$0.31
INITIAL NET DEBIT TARGET=$1.75 TARGET ROI=25%

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

****

MLTX - Multex.com  $17.81     *** Technicals Only ***
 
MLTX is a provider of online investment research and information
services designed to meet the needs of individual & institutional
investors, including investment banks, brokerage firms and other 
companies. Their services enable online access to over 900,000
research reports and other investment information on over 15,000
companies from more than 400 investment banks, brokerage firms
and third-party research providers worldwide.

The company has been rumored to be a target of one of the major brokerage firms and with the recent favorable trend, this play
provides an opportunity for excellent upside potential with good
protection against a major reversal. The character of the stock
is showing positive divergences in several technical indicators
as it enters a stage-one base. The issue is establishing support
near $13 (September/October lows) with resistance in the $17-$20
range. The outlook is bullish though the stock should consolidate
as it works through overhead supply and our theoretical edge will
help in the event of an upside move. Our plan is to transition to
a diagonal spread in December.

PLAY (aggressive - neutral/calendar spread):

BUY  CALL MAY-17.50 UXM-EW OI=40  A=$5.00
SELL CALL NOV-17.50 UXM-KW OI=449 B=$1.18
INITIAL NET DEBIT TARGET=$3.62 TARGET ROI=50%

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

****

CHA - Champion International  $61.38   *** Short-Term Play ***

Champion is one of the leading domestic manufacturers of paper
for business communications, commercial printing, publications
and newspapers. In addition, the Company has significant market
pulp, plywood and lumber manufacturing operations and owns or
controls approximately 5,300,000 acres of timberlands in the
United States. Their Canadian and Brazilian subsidiaries also
own or control significant timber resources supporting their
operations.

The stock price has rallied over the last two weeks and implied
volatility and volume in options remained high today as takeover
rumors re-circulated. The commentary on a popular Internet site
listed Champion as among potential merger candidates and now the
company is experiencing some "buyout" rumblings on Wall Street.
Some analysts say there is a deal in the works with a European
paper company and in early August, a Finnish forest industry
group, UPM-Kymmene was the subject of speculation in a previous
merger rumor. We simply favor the short-term potential of the
underlying issue and owning it at $55 might not be such a bad
play.

PLAY (aggressive - bullish/credit spread):

BUY  PUT NOV-50 CHA-WJ OI=146 A=$0.19
SELL PUT NOV-55 CHA-WK OI=80  B=$0.50
INITIAL NET CREDIT TARGET=$0.38 ROI=8% (10 days)

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


*********
STRADDLES
*********

The last few days have provided some new volatility in the market
and most of our Internet straddle positions have performed far
better than expected. The American Online (AOL) straddle reached
a high of $33 on Monday, a $15 profit and Go2Net (GNET) traded as
high as $26 credit, an $8 return on $17.88 originally invested.
Ebay Inc. (EBAY) is the only Internet issue that has disappointed
in the short-term but the positions proved to be salvageable on a
individual basis. As we suggested last week, a successful test of
recent lows near $128 provided some support for a post-earnings
rebound. An early exit of the bearish position near that price
yielded about $24 credit, which leaves the call option in place
to bring the overall play back to a favorable exit. Most of our
other plays have performed well considering that many of them are
mired in lagging sectors. One of the new candidates that appears
to have good potential is Univision (UVS). The stock price has
moved down almost $4 since originally picked and the overall
credit will soon be at our break-even of $14.75. The straddle
traded as low as $14.50 the first day it was offered (we were
not patient enough to get that price) and thus we are now at a
slight disadvantage in the play.

Sunday's new plays (positions/opening prices/strategy):
 
Cullen Frost Bankers  CFR  MAR30C/MAR30P  $3.00  debit  straddle

Our new straddle position, Cullen Frost Bankers (CFR) was a big
winner right from the start. The position was initiated by one of
our subscribers (at market price - $3.06 debit) in the first few
minutes of trading and after the order was filled, the straddle ballooned back to a theoretically correct price. The position
was bid at $3.56 near the close, a one-day profit of $0.50 on
simple option pricing disparity.



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



DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

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