Option Investor
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Daily Newsletter, Wednesday, 02/16/2000

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The Option Investor Newsletter         Wednesday  2-16-2000
Copyright 2000, All rights reserved.
Redistribution in any form strictly prohibited.

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

Also provided as a service to The Online Investor Advantage
******************************************************************
MARKET WRAP  (view in courier font for table alignment)
******************************************************************
       2-16-2000           High     Low     Volume Advance Decline
DOW    10561.40 - 156.70 10741.70 10561.40 1,019,616k 1,292  1,722
Nasdaq  4427.65 +   6.88  4477.64  4413.66 1,782,127k 2,046  2,164
S&P-100  754.20 -   8.86   763.78   753.63    Totals  3,338  3,886
S&P-500 1387.67 -  14.38  1404.55  1385.58            46.2%  53.8%
$RUT     547.76 +   7.52   549.68   540.24
$TRAN   2454.79 +   5.89  2479.62  2434.17
VIX       25.10 +   0.49    25.76    24.21
Put/Call Ratio       .49
******************************************************************

Just Like Watching Paint Dry

Somebody put me out of my misery.  The market was going nowhere, 
volume was average and stocks are moving like they have cement 
shoes.  Even CNBC has given up and forced us to watch President 
Clinton's "lively" press conference all afternoon instead of 
following the markets.  When CNBC decides to leave coverage 
of the markets, you know you are in for breaking news or time 
to snooze.  Today was the latter.  But it's not their fault.  
It falls squarely on the shoulders of us traders.  They have 
nothing to report because we aren't placing the bets.  Everyone 
is waiting to hear what the mighty Greenspan will say at his 
bi-annual Humphrey-Hawkins testimony tomorrow before the Senate.  
Not to mention a PPI and CPI due out this week.  

These signs of indecision apparently have begun to weigh on the 
markets as they drifted lower into the close.  The scenario is 
a familiar one too, with the Dow leading the way down.  The 
Nasdaq remained fairly range-bound for most of the day without 
really breaking one way or the other.  You can see this pattern 
in the chart below.  This pattern of indecision has gone on for 
a week now as we are at the same price on the Nasdaq as we 
closed on Feb 8th.  Today it closed at 4427.65, up 6.80.  Volume 
was just over 1.7 billion shares. 


 

It is the Dow Industrials that are more concerning.  It closed 
at 10561, down 156.68.  Volume was just over a billion shares.  
Check out the inability for the Dow to rally above the 10-day 
moving average.  As one trader said "the Dow should of have taken 
the eight-count yesterday instead of trying to get back up."  
Well said.  There seems to be an unspoken rule of sell everything 
not tech-related to generate enough cash to buy the Nasdaq dips.  
The sectors weighing it down included Retail and Financial 
stocks.  The Financials were down the day before a key interest 
rate meeting?  What a shocker.  You get the picture here, same 
old story.  Interest rate fears, lack of buyers, unsustainable 
stock increases, but yet no one journeying too far from their 
broker in fear of missing out on the next up move.  


 

The sector of the day was the Biotech group, thanks to HGSI.  
They received a critical patent on a human gene that produces 
what is believed to be the entry point to the AIDS virus.  If 
it sounds impressive, wait until you see the stock price.  HGSI 
climbed $33.25 to end at $188.  Not to mention it sparked the 
entire group to big gains.  SEPR +11.63, MLNM +42.75, AFFX 
+6.63, and IMNX +14.81.  
  
Shares of DoubleClick (DCLK) were halted late in today's 
session as news became available pertaining to a pending 
investigation by the Federal Trade Commission into the their 
privacy policies.  DCLK has plans to build a huge consumer 
database which cross-references Internet users surfing habits.  
DCLK uses what are known in the Internet advertising world as 
software "cookies".  Software cookies basically attach 
themselves to an Internet users machine when they click on a 
certain advertisement.  When that user goes to another site 
and clicks on another ad, the cookie is able to recognize the 
browser and thus track that users online activity.  Cookies 
can even be programmed to go in and retrieve personal 
information from computers such as the users name, phone 
number, home and e-mail addresses.  You can see where this 
could raise some concern.  For the most part, all of this 
takes place without the Internet user ever being aware of it.  
DCLK was trading after-hours down at $93.  

Earnings announcements continue to fuel some big moves in 
the market.  On Tuesday following the close of the market, 
Applied Materials announced earnings 3 cents better than 
analysts expectations and further sweetened the announcement 
with a 2:1 stock split to be payable on March 15th.  AMAT 
closed today's session at $173.38, up $6.88.

Shares of Viacom were doing some rollin' following a rockin' 
earnings announcement, which was bested analysts expectations 
by five pennies.  Viacom owns MTV and VH1 and plans to complete 
the $37 billion dollar merger with CBS in the near future.  
VIA closed the session down $3.25.

Shares of HWP closed up nearly five points as investors 
anticipated the earnings announcement following today's market 
close.  Analysts were expecting earnings of 77 cants a share 
versus 92 cents one year ago.  HWP came in at 80 cents a share.  

CheckFree announced plans late Tuesday to purchase their rival,
TransPoint.  TransPoint is the electronic billing and payment 
joint venture that was formed by Microsoft, First Data 
Corporation and Citigroup.  The deal is worth an approximate 
$1.2 billion and will make CheckFree the leading online billing
company.  Though online billing has been rather slow to catch 
on up to this point, many see this acquisition offering the 
potential to change that.  Analysts believe that having one 
common computer platform for consumers to access for online 
bill payment may prove to be more appealing.  Not only was the 
news welcomed with a few raised price targets, investors seemed 
very enthusiastic as well.  CKFR closed up $32 at $100.25 
posting volume near 16 million.

Apparently, Healtheon/WebMD (HLTH) has a healthy appetite for
acquisitions.  Today, the Internet healthcare company announced 
that is agreed to purchase OnHealth Networks for an approximate 
$264 million in stock.  OnHealth Networks is and Internet health
website.  This is the second acquisition announced by Healtheon 
this week.  On Monday, HLTH said that it would be acquiring 
rival CareInsite in a deal worth about $5.4 billion in stock.  

As we all know, breaking up is hard to do.  Well today, 
Microsoft took this sentiment one step further and commented 
that should the government take the steps to break up the 
software giant, the move would be considered "extreme and
unwarranted...a regulatory death sentence while the high-tech 
economy whizzes by on Internet time."  Being the amicable 
company that MSFT is, spokesperson Jim Cullinan went on to 
comment that "We thought it was a good time to let the members 
of (Congress) know our position exactly...that we've always 
been interested in coming to a fair and reasonable settlement 
that addresses the government's concerns."  As you may 
remember, "secret settlement negotiations" began in November 
and were stalled last month as news of a possible MSFT breakup 
seeped into the market.  Steve Ballmer, MSFT CEO, called the
government's inability to control the information reckless 
and irresponsible.  

The market weakness may continue tomorrow with both HWP and 
DCLK trading down late Wednesday.  Expect these two top-tier 
companies to weigh on both the indices and their sectors.  But 
the real news will be the PPI before market open.  The forecast 
is for an 0.2% rise, with an 0.1% rise in the core rate.  A bad 
report could set the stage for a dark day, which will include 
testimony from Greenspan at 10am EST.  A positive PPI could break 
the Nasdaq above the 4500 resistance level.  It wouldn't surprise 
me to see the market weakness continue for a little longer.  The 
housing starts report released this morning was stronger than 
expected and it seems that the Fed's stock pile of ammo to use 
against the market is growing.  High oil prices have yet to come 
down as some had hoped.  This is a major inflationary issue too.  
Don't get me wrong, if the market wants to head higher or we 
see evidence of a good bottom, I will be a buyer.  I have been 
profitable this week, but choosing my trades carefully (SEPR 
today, for example).  So until we get closer to April earnings 
season, use caution.  Notice we didn't get much of a anticipation 
move like we've seen lately before key reports.  It could be 
that traders are willing to become watchers instead of buyers 
this time around.

Ryan Nelson
Asst. Editor  

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

Superconductor Technologies Doubles on Wireless Craze
By Cindy Christ

Investors looking for the next big thing acted like they found
it Wednesday in a tiny company called Superconductor
Technologies (SCON).

Based in Santa Barbara, Calif., Superconductor Technologies
makes products that improve the performance of wireless
communications.

http://members.OptionInvestor.com/stocknews/021600_1.asp


**********************
PLAY OF THE DAY - CALL
**********************

BEAS - BEA Systems $122.00 +1.25 (+14.00 this week)

Founded in 1995 BEA Systems has become widely known as a 
leading provider of middleware for enterprise applications.
This is largely because of the success of BEA Tuxedo and BEA
WebLogic, which together comprise approximately 46 percent
of the transaction server market.  Amazon.com, FedEx and 
Ericsson use BEA TUXEDO, to process millions of transactions
daily.  BEAS entered the market for application servers, Java-
based software used in developing and integrating e-commerce
and other Internet based applications with BEA WebLogic.  BEAS
provides complete solutions to its customers through a full 
range of services including, developing customer components,
consulting, training and support.

Sunday's Write Up 

The only thing BEAS suffered from Friday was a real lack of new
buyers.  BEAS made it through the broad market decline, virtually
unscathed, ending the day down just $0.50.  That's a real 
positive in our book and marks the second time this week the
company's stock has held up, with selling going on all around
it.  Actually BEAS did better this second go-around than it did
Wednesday, when traders got up on the wrong side of the bed.
Friday BEAS, begrudgingly traded down to $107, before investors
bid the price back up.  Another check in the plus column for
this play shows that since the Jan 31st, BEAS has shot up over
$32 and still refuses to give way, when presented with 
opportunities to head south.  This doesn't mean BEAS, couldn't
give way to continued outside pressures, but we are very pleased
with it's performance so far.  BEAS broke through the $90 level
and the century mark to make new highs.  $110 is the current
high and the next target for BEAS to surpass.  Earnings for
the BEAS are due to come out Feb 22nd and the expectations
of solid quarterly results should continue to give this play
the push it needs to continue higher.  Note that technically, 
Stochastics, RSI and several other indicators show BEAS to be
getting a bit overdone.  Not that we couldn't see a retracement,
but how many times have you seen a stock travel in over-bought
territory for weeks with very little correction?  Case in point,
the Nasdaq.  We aren't throwing the technicals out, but in this
kind of market, target shoot you entry points off support and
resistance, and set your stops accordingly.  For BEAS those 
points are $108, $106 and $102.

The top news of the week for BEAS had to be the comments made
by Jim Burkart, co-leader of the Kemper Technology Fund.
Burkart stressed the important place that BEAS and similar
smaller companies have in their fund.  Although they own many
of the big names, Burkart said that "bigger is not necessarily
better" stating that BEAS was on his list of favorites.

Tuesday's Write Up

BEAS has added +12.75 in two days, after being in what some 
would consider an overbought technical state.  But sometimes 
there is no stopping momentum.  BEAS is in the middle of a very 
nice earnings run and traders that have profited from the move 
the past few days don't care whether BEAS is overbought or not.  
Yes, there could be a round of profit taking or a brief 
consolidation, but the volume the past two days certainly 
suggests there is more of a move to the upside ahead.  BEAS 
has seen more than 7.2 million shares change hands in the move 
to new highs, which supports our belief that BEAS is not done.  
BEAS closed on an intraday support level of $120.  The next 
area of support is seen at $115.  Should we see some profit 
taking those would be good points at which to add to or enter 
new positions.  BEAS is scheduled to report earnings next 
Tuesday after the close, so we still have time for this play 
to cook.

BUY CALL MAR-110 BUC-CB OI=203 at $24.00 SL=18.75
BUY CALL MAR-115*BUC-CC	OI=380 at $22.13 SL=17.25
BUY CALL MAR-120 BUC-CD OI=168 at $19.50 SL=15.25
BUY CALL MAR-125 BUC-CE OI=168 at $17.25 SL=13.50
BUY CALL MAR-130 BUC-CF OI=216 at $15.13 SL=11.75

Picked on Feb 06th at    $89.25    PE = N/A
Change since picked      +32.75    52-week high=$124.38
Analysts Ratings     10-1-1-0-0    52-week low =$  3.53
Last earnings 11/99   est= 0.05    actual= 0.06 
Next earnings 02-22   est= 0.07    versus=-0.03
Average daily volume = 2.88 mln
/charts/charts.asp?symbol=BEAS



*************************************
BIG COVERED CALLS & NAKED PUT SECTION
*************************************

As Wall Street contemplates a Greenspasm...

We continue to find that conservative covered-writes and deep OTM
put positions offer an excellent strategy for an uncertain Market.
The Summary below demonstrates the value of hedged positions;
those that offer a reasonable return at minimal risk to one's
investing capital.


Summary of Previous Picks:

Covered Calls:

Stock  Strike Strike Cost   Current Profit  Monthly
Symbol Month  Price  Basis  Price   (Loss)  Return

MRVC    FEB     60   58.00   78.13   2.00    6.6%
RNWK    FEB     75   71.72   86.44   3.28    6.0% Split 2 -1
RIMM    FEB     60   57.38  106.00   2.62    6.0%
NEWP    FEB     55   52.06  124.00   2.94    5.7%
DITC    FEB     90   85.25  187.50   4.75    5.6%
JNPR    FEB    125  120.12  220.50   4.88    5.4%
NSM     FEB     50   48.63   61.63   1.37    5.4%
ASDV    FEB     60   57.00  115.63   3.00    5.3%
NEWP    FEB     65   63.25  124.00   1.75    5.3%
CNXT    FEB     65   61.93  122.44   3.07    5.0%
HLIT    FEB     95   91.56  125.88   3.44    5.0%
VRIO    FEB     55   52.50   72.63   2.50    4.8%
CTXS    FEB    125  122.00  168.13   3.00    4.7%
MERQ    FEB     55   53.16   77.50   1.85    4.6% Split 2 - 1
ADAP    FEB     75   71.06  110.00   3.94    4.6%
CNXT    FEB     75   73.50  122.44   1.50    3.9%
GMH     FEB    100   95.81  100.63   4.19    3.6%
NVLS    FEB     38   36.48   54.81   1.53    3.4% Split 3 - 1
QCOM    FEB    125  119.00  121.88   2.88    2.5%

INSP    MAR    145  135.56  199.13   9.44    5.7%
ITVU    MAR    105   98.25  137.50   6.75    5.6%
FIBR    MAR     55   51.75   84.75   3.25    5.2%
IMNX    MAR    130  122.50  170.94   7.50    5.0%
MUSE    MAR    175  165.00  214.56  10.00    5.0%
DITC    MAR    125  117.87  187.50   7.13    5.0%

Naked Puts:

Stock  Strike Strike Cost   Current Profit  Monthly
Symbol Month  Price  Basis  Price   (Loss)  Return

FIBR    FEB     60   58.94   84.75   1.06   21.8%
ITVU    FEB    105  103.56  137.50   1.44   16.6%
IMNX    FEB    130  128.56  170.94   1.44   14.2%
DITC    FEB    130  128.56  187.50   1.44   14.0%
DITC    FEB     85   81.25  187.50   3.75   13.7%
NEWP    FEB     60   58.81  124.00   1.19   13.6%
IMNX    FEB    115  112.50  170.94   2.50   13.5%
MRVC    FEB     55   53.94   78.13   1.06   12.6%
NSM     FEB     50   48.88   61.63   1.13   11.9%
QCOM    FEB    115  111.12  121.88   3.88   11.8%
RNWK    FEB     65   64.00   86.44   1.00   10.8% Split 2 - 1
CTXS    FEB    120  117.94  168.13   2.06   10.8%
JNPR    FEB    113  110.62  220.50   2.38   10.1%
CNXT    FEB     60   58.25  122.44   1.75    9.9%
VRIO    FEB     50   48.56   72.63   1.44    9.7%
NEWP    FEB     50   48.69  124.00   1.31    9.5%
SDLI    FEB    230  227.00  319.69   3.00    9.3%
VIGN    FEB    145  143.00  201.78   2.00    9.1%
JNPR    FEB    110  108.63  220.50   1.38    9.0%
HLIT    FEB     85   83.44  125.88   1.56    8.6%
RNWK    FEB     65   63.88   86.44   1.13    8.2% Split 2 - 1
INSP    FEB    150  149.00  199.13   1.00    8.1%
ASDV    FEB     50   48.81  115.63   1.19    7.7%
RIMM    FEB     50   49.19  106.00   0.81    7.1%
ADAP    FEB     65   63.25  110.00   1.75    7.1%
CTXS    FEB    120  117.69  168.13   2.31    7.0%
CNXT    FEB     70   69.31  122.44   0.69    6.9%
MUSE    FEB    175  174.00  214.56   1.00    6.4%
PGTV    FEB     95   93.69  134.56   1.31    6.3%
NXTL    FEB    100   98.12  120.75   1.88    6.3%
VIGN    FEB    160  157.69  201.78   2.31    6.2%
PMCS    FEB     75   74.06  160.81   0.94    5.8% Split 2 - 1
NVLS    FEB     33   32.63   54.81   0.71    5.8% Split 3 - 1
MERQ    FEB     47   46.94   77.50   0.57    5.6% Split 2 - 1
GMH     FEB     95   92.75  100.63   2.25    5.6%

INSP    MAR    130  125.37  199.13   4.63    9.3%
HLIT    MAR     95   92.50  125.88   2.50    7.4%
PROX    MAR     80   78.50  127.50   1.50    5.2%


NEW PICKS 

The positions that we find favorable (and will track every week) 
will be marked by asterisks. Do not enter these trades unless you
fully understand the strategy and various methods of manipulating
the position should the stock price drop or rise and in the event
you decide you want to keep the issue.

****

CHINA - China.com  $117.50   *** On The Move! ***

China.com Corporation is a pan-Asian Internet company delivering
content, community and commerce through its portal network to
Chinese language audiences interested in local Portal services
emphasizing the Greater China region.  Spun from China Internet
(set up by Xinhua, China's official news agency) in anticipation
of its 1999 IPO, china.com is an Web portal with four sites:
china.com, taiwan.com, hongkong.com, and cww.com.  It operates AOL
Hong Kong for the US giant and owns 80% of Yes!Net, a Taiwan
Internet firm, and 15% of music portal AudioLoad.com.  The sites
offer Chinese and English language news and information, city
guides, e-mail, and chat rooms.  China claims about 2 million
registered users and also provides Internet ad services (with 24/7
Media) and consulting through The Web Connection.

China.com rallied this week on news that quarterly earnings rose
by 25% and revenue in the last quarter increased 10-fold.  Growth
in revenues came from advertising and their Web development and
consulting business.  Unfortunately, the costs associated with
generating advertising and e-business opportunities in the region
contributed to widening losses.  Last year, China made a large
number of strategic investments in regional Internet companies.
Some of those moves have increased the company's profile and
helped to boost registered community membership on its network of
portal sites.  The company reported that average daily page views
on its portal network grew 68% from the previous quarter.

From a technical viewpoint, the issue has excellent support near
our cost basis and the over-priced option premiums will allow us
to open the position at a favorable entry point.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAR 95   UIH CS  86       27.38    90.12     5.5% ***

Sell Put  MAR 80   UIH OP  64       1.44     78.56     5.9% 
Sell Put  MAR 85   UIH OQ  219      2.38     82.62     9.3% ***
Sell Put  MAR 90   UIH OR  25       3.38     86.62    12.7%
Sell Put  MAR 95   UIH OS  88       4.75     90.25    16.5%

Chart =
 /charts/charts.asp?symbol=CHINA

****

ENTU - Entrust Technologies  $78.88   *** Online Security ***

Entrust Technologies provides products and services to ensure
secure electronic communications and transactions over the
Internet, Extranets and Intranets.  The ENTU solution automates
the management of digital certificates through public key infra-
structure (PKI) technology designed to assure the privacy and
authenticity of internal and external electronic communications.
The company's PKI solution provides highly functional and flexible
management of network security features across an enterprise and
between organizations.  The ENTU PKI solution offers enterprises
all of the functionality necessary for full life cycle management
of public keys and digital certificates, including enterprise
certificates for use across multiple applications, as well as
certificates for secure Web transactions and secure credit card
transactions.

The incredible growth in e-commerce has created a number of new
leaders in the thriving security software sector.  The recent
series of hacker attacks against several well-known web sites has
also contributed to the success of companies that sell security
products.  These issues appear to be immune to the technology glut
and despite the broad decline in the markets, several of the top
stocks have made significant gains.  The addition of new companies
to the Internet will also propel the group as customers accumulate
products such as system protection, anti-virus and encryption
software.

Today's rally may be the beginning of a new trading range for this
issue and we favor the technical support near the cost basis.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAR 65   QYE CM  114     17.00     61.88     5.1% ***

Sell Put  MAR 60   QYE OL  39       1.69     58.31     9.8% ***
Sell Put  MAR 65   QYE OM  69       2.94     62.06    14.5%

Chart =
 /charts/charts.asp?symbol=ENTU

****

LWIN - Leap Wireless International  $91.88   *** A New High! ***

Leap Wireless International is a wireless communications carrier
that deploys, owns, operates and participates in CDMA telecom
networks in domestic and international markets.  Spun off from
QUALCOMM in 1998, Leap Wireless, which owns stakes in mobile
phone operations in Tennessee, Mexico, and Chile, claims 111,000
proportionate subscribers.  Its wholly owned SMARTCOM (PCS) has
78,000 subscribers in Chile, and its PEGASO joint venture in
Mexico boasts some 110,000 subscribers.  They also own 7% of
Chase Telecommunications of Tennessee, which has more than
22,000 subscribers in its Cricket service.  The Leap Wireless
affiliates all use CDMA (code division multiple access) digital
networks.

The sector is booming and LWIN's value is starting to benefit from
the recent focus on the companies in this group.  In the past few
weeks, LWIN has announced a number of approved acquisitions of
new operating licenses.  The company also recently reported it has
increased its proposed underwritten public offering from 3 million
shares to 4 million shares of its common stock.  In addition, the
company is funding new growth with the sale of $525 million of
Caa2/CCC rated 10-year senior and senior discount notes.

LWIN has made some incredible gains in the past few months and
with the recent break-out above the resistance area near $75, this
issue also appears poised for a new trading range.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAR 80   UIN CP  0       16.25     75.63     5.9% ***

Sell Put  MAR 70   UIN ON  37       1.81     68.19     9.1% ***
Sell Put  MAR 75   UIN OO  18       2.88     72.12    12.8%

Chart =
 /charts/charts.asp?symbol=LWIN

****

MUSE - Micromuse  $214.56   *** Net Management ***

Micromuse develops and supports scaleable, configurable, rapidly
deployable, software solutions for the effective monitoring and
management of multiple elements underlying an enterprise's
information technology infrastructure.  The company is a leading
provider of service-level management software and their Netcool
suite of applications is used by network service providers,
Internet service providers, telecommunications firms, and
mission-critical enterprises worldwide.

An industry analyst recently commented that software service
providers that can deliver billing solutions, value-added
products (such as voice-mail, caller id, wireless Internet) and
trouble-free systems with enhanced customer care will experience
a number of benefits.  They will achieve increased customer
interaction by providing the desired, unique services and will
differentiate themselves from the competition.  Micromuse fits
that description well and it appears the issue is poised for
higher share value growth in the future.  The bullish trend is
comfortably intact and the technical support near the 50 DMA
(at $175) provides a number of favorable, low risk positions.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Put  MAR 155  QVM OK  20       2.81    152.19     6.2%
Sell Put  MAR 160  QVM OL  0        3.75    156.25     8.1% 
Sell Put  MAR 165  QVM OM  5        4.63    160.37     9.9% ***
Sell Put  MAR 170  QVM ON  12       5.50    164.50    11.5%
Sell Put  MAR 175  QVM OO  6        7.00    168.00    13.3%

Chart =
 /charts/charts.asp?symbol=MUSE

****

NEON - New Era Of Networks  $65.00   *** Break-out Coming? ***

New Era of Networks is the leading provider of e-Business
integration software.  Its products enable companies to share
information and manage end-to-end business processes across
Internet-facing e-Business applications, packaged software such
as ERP systems, and legacy applications.  NEON has a rapidly
growing base of 2,500 customers worldwide in a variety of
industries including financial services, insurance, manufacturing,
health-care, telecommunications and hospitality.  NEON has
demonstrated that its products shorten implementations while
providing performance and reliability, proven in some of the most
demanding transaction processing environments in the world.  
NEON partners with most of the leading IT software and service
providers including IBM, BEA Systems, Broad Vision, Sun/Forte,
Cambridge Technology, CIBER, Compaq, and Hewlett-Packard.

In January, NEON reported a return to profitability with record
revenues in the fourth quarter driven by e-Business and a strong
demand for their infrastructure platforms.  Goldman Sachs analyst
Anne Meisner followed the bullish report with a revised rating of
"market out-performer."  The company is enjoying a return to favor
among analysts after last summer's earnings shortfall and it now
appears the issue is attempting to achieve a new all-time high.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAR 55   QNO CK  46       13.00    52.00     5.8% ***

Sell Put  MAR 50   QNO OJ  75        1.56    48.44    10.9% ***
Sell Put  MAR 55   QNO OK  80        2.94    52.06    15.7%

Chart =
 /charts/charts.asp?symbol=NEON

****

SCMR - Sycamore Networks  $116.06   *** Awesome IPO! ***

Sycamore Networks develops and markets products that transport
voice and data traffic over wavelengths of light, designed to
enable customers to quickly and cost effectively create usable
network capacity over existing fiber.  Sycamore's helps keep up
network speeds by marketing optical networking products that
enable network service providers to upgrade their existing fiber-
optic networks to offer more bandwidth.  Its SN 6000 transport
node helps companies provide high-speed services.  Sycamore also
designs add/drop nodes, optical switches, and network management
software.  Sycamore targets telecom service providers, Internet
service providers, and cable operators.

Sycamore has been one of the more reserved IPO's, slowly and
steadily increasing in value. With the recent split and a number
of upgrades, Sycamore appears even more appealing to investors.
The over-priced option premiums will provide interested traders
with an excellent entry point.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAR 95   QSM CS  161      26.75    89.31     6.5%

Sell Put  MAR 85   QSM OQ  328       3.50    81.50    13.3%
Sell Put  MAR 90   QSM OR  149       4.75    85.25    17.2%
Sell Put  MAR 95   QSM OS  114       6.25    88.75    20.0%

Chart =
 /charts/charts.asp?symbol=SCMR

****

TIBX - Tibco Software  $244.88   *** Split Rally! ***

Tibco Software develops and markets a suite of software products
that enables businesses to link internal operations, business
partners and customer channels in real-time.  The company's suite,
TIB/Active-Enterprise, allows multiple distinct applications, Web
sites, databases and other content sources to be integrated and
managed within a common framework.  The company's products also
enable enterprises to extend their information infrastructures
across the Internet to integrate their business processes and
information with customers, suppliers and partners.  Their
products are currently in use by over 300 companies in diverse
markets such as telecommunications, high-tech manufacturing,
energy, financial services and e-business.

A 3-for-1 split is upcoming and today's move suggests that most
investors want in before the deed is done.  With the potential
for a small post-split sell-off, we are going to enter this play
near the recent consolidation area at $175-$180.  The technicals
are very favorable for this issue but we strongly advise that you
use the volatile inter-day movement to improve the initial cost
basis for this position.

Action    Month &  Option  Open     Closing  Cost     Monthly
Req'd     Strike   Symbol  Interest Price    Basis    Return

Sell Call MAR 195  PAV CS  1        59.50   185.38     5.3% ***
Sell Call MAR 200  PAV CT  102      56.13   188.75     6.0%

Sell Put  MAR 170  PAV ON  27        3.50   166.50     6.8%
Sell Put  MAR 175  PAV OO  0         4.50   170.50     8.5% ***
Sell Put  MAR 180  PAV OP  56        5.38   174.62    10.0%
Sell Put  MAR 185  PAV OQ  38        6.25   178.75    11.5%

Chart =
 /charts/charts.asp?symbol=TIBX



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