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 *************************Advertisement**************************** Options Traders ! Mr. Stock's new online trading site has been designed for you. Trade spreads, straddles, covered writes, and stocks online. Get real-time market data throughout our site. Advanced options tools include volatility graphs, implied volatilities, and more. http://mojofarm.mediaplex.com/adserver/click_thru_request/565-58-1875-3 ****************************************************************** *********** 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 ************************Advertisement************************* Tired of waiting on trades to execute? Does your broker offer Stop Losses on Options? Trade instantly with Stop Losses at Preferred Capital Markets Stop Losses based on the option price or the stock price. 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