Option Investor

Daily Newsletter, Wednesday, 03/08/2000

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The Option Investor Newsletter         Wednesday  3-8-2000
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)
       3-08-2000           High     Low     Volume Advance Decline
DOW     9856.50 +  60.50  9918.90  9731.80 1,203,082k 1,429  1,535
Nasdaq  4897.26 +  49.42  4923.14  4722.14 2,007,629k 1,895  2,365
S&P-100  739.86 +   7.61   744.35   727.89    Totals  3,324  3,900
S&P-500 1366.70 +  11.08  4874.87  1346.62            46.0%  54.0%
$RUT     594.68 -   0.79   600.39   579.16
$TRAN   2352.53 +  88.94  2362.91  2261.96
VIX       25.95 -   0.68    28.80    25.40
Put/Call Ratio       .46

Two Markets, Two Bounces,...Same Theme

Continuing their decline from yesterday, the Blue Chips moved
down in the first hour of trading, as investor nervousness
continued.  The DOW managed to bounce early in the day at 9731
and moved up from there.  Supported by value investors looking
to buy stocks that have been beaten down lately, the DOW looked
like it might post a decent recovery, up almost 120 points from
its low by 2:30pm EST.  The Volatility Index (VIX) moved up
early in the day to just over 29 before retreating throughout 
the day.  Ending the day at 26.14, this put the indicator right 
near the middle of its historical range.  At least a sign that 
things may be cooling down after yesterday's scare.

Banging its head at 9918 in the afternoon was enough to push
the index down for the rest of the session.  After such a large
drop yesterday, the weak recovery today seems more like a
dead-cat bounce.  Interest rate fears are still alive and well 
across most sectors.  Another increase when the FED meets on
March 21st is almost a foregone conclusion - the only
uncertainty being...how much this time and is this the last?


Although largely a non-event, the FED survey known as the Beige
Book came out today and showed little inflation despite a tight
labor market.  The report highlighted limited increases in the
prices of final goods and services (transportation services and
certain commodities excepted due to the meteoric price rise in
crude oil), despite faster wage growth for some workers.  Strong
sales of semiconductors and other high-tech equipment, along
with increasing demand for a variety of manufactured products
such as furniture and electronics will only encourage the FED's
hawkish stance when it meets later this month.

Continuing to express his concern about the economy, Alan
Greenspan today cautioned banks not to become complacent in
their lending practices.  Speaking to the Independent Community
Bankers of America, the FED chairman said, "A broader and more
troubling risk is that many banking institutions view current
strong economic conditions as no longer extraordinary and
exceptional, but as ordinary and expected".  He went on to voice
concern about the "grave consequences" to the industry should
economic conditions weaken.

This is more of the same song and dance from our lovable nemesis
and represents nothing new for us as investors.  Interest rates
are going up, the economy is strong, and labor is tight.  At the
rate the tech freight train keeps roaring down the track, the
continued spectre of rate hikes will bother the "old economy"
stocks more than those from the "new economy".

Ok, here are the vital numbers.  The DOW managed to bounce off
its low of 9731 to add 49.42 by the end of the day, closing at
9856.53.  Although posting 8% more up than down volume on
roughly 1.2 billion shares, the NYSE internals still don't
look very healthy.  Decliners beat advancers by a 15-to-14
ratio, and 263 new lows swamped the mere 49 new highs.  That's
not exactly a resounding vote of confidence for the day after
the index's 4th largest point loss.  The sentiment doesn't look
that great when you consider that yesterday's loss capped off
a 17% decline (so far) from the high of 11722 seen in January.

All right, so the DOW didn't look so great.  How about the
NASDAQ?  Although seeing some weakness in recent winners such
as Biotechs and Semiconductors, the tech index didn't look 
too bad.  Sellers stepped in early, taking the index right to
key support.  Bouncing at 4722, the NASDAQ recovered from a 
125-point deficit to climb steadily for the balance of the day.
Posting yet another 2 billion share day, and gaining 49.42 to
close at 4897.26, the internals were better than on the Big
Board.  Decliners did beat advancers by 2372 to 1898, but 18%
more up than down volume and 196 new highs vs. 167 new lows
paints a picture of mere profit-taking ahead of the next run
at N5K.


After Saudi Arabia and Iran signaled that OPEC will increase
oil production when the production limit agreement expires at
the end of the month, crude oil prices fell 8% from yesterday's
9-year high of $34.37/barrel.  Oil and Oil Service stocks
dropped in response, led by the likes of SLB (-5.13, $77.06) and
HAL (-4.63, $39.88).  Don't rush out to top off your tank though.
It takes months for new oil to make it through the production
pipeline and show up as gasoline.  If the refineries don't
increase production, the supply shortage still exists, and the
approach of the summer driving season, means prices could still
challenge $2.00 at the pump.

If you still believe what you hear from Washington, (Yes
Virginia, there is a Santa Claus), Energy Secretary, Bill
Richardson pledged that he will not allow gasoline prices to
top the $2.00 mark.  No matter how you slice it, the extreme
levels will eventually trickle down and start to have an
inflationary effect.

An alliance between a tech stock, a retailer, and an oil
company?  Believe it or not, Oracle (ORCL), Wal-Mart (WMT),
and Chevron (CHV) announced they will form an online supply
exchange for the convenience store industry.  Assigned the
moniker RetailersMarketXchange.com (what a mouthful!), the
exchange is designed to reduce costs for retailers and
independent stores by creating a centralized Internet
marketplace.  ORCL seems to be the big winner here as the
company saw its shares up $8.19, while WMT and CHV closed
up fractionally.

Need proof that investors are still in love with tech stocks?
Look no further than the B2B deal announced this morning by
IBM, I2 Inc., (ITWO) and Ariba Inc., (ARBA).  In a joint
statement the companies announced the deal, which calls for
IBM, the world's largest computer company to take minority
stakes in both ARBA and ITWO.  The alliance will help firms
create full-service online B2B marketplaces by providing
logistics support for buying, selling, distribution, and
inventory-control activities.  All three companies moved up
on the news, ARBA (+6.50, $331), ITWO (+22.19, $190.63), and
IBM (+2.88, $105.88).

So where do we go from here?  It is starting to sound like
a broken record, but the strength is in the NASDAQ.  The minor
recovery on the DOW didn't come anywhere near kicking it out of
its downtrend.  The NASDAQ on the other hand needed to take a
break so that it can move higher from here.  We have got enough 
fear selling this morning to begin a new leg higher.  Just over 
100 points from N5K, it is only one good day from a close above
this level.  Keep in mind that as we approach the April earnings, 
we first have to navigate the earnings-warning minefield.  As we 
saw yesterday with the carnage that followed Proctor & Gamble's 
warning, the consequences of disappointing investors can be 
severe.  The other possible fly in the ointment is the Initial 
Jobless Claims due out tomorrow morning.  If employment shows up 
tighter than expected, look for both indexes to have trouble 
moving higher.  On the other hand, a tame number could be just 
what the NASDAQ needs to power above that millennium mark, 
setting the stage for another whopper of an earnings season.

Mark Phillips
Research Analyst

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Koala Corp:  A Good Low Tech Bet in a Tech-Driven Market
By Matt Paolucci

The wild swings in stock prices these days are enough to make
your head spin. Just a few years ago it used to be big news to
see shares of a stock moving up or down several points. Stocks
like that were considered far to volatile and risky for the
average investor. Besides, the only times you'd see a stock 
leap or plunge back then would be for something extraordinary,
such as news of a merger or a scientific breakthrough. Today,
if you announce a stock split of any kind, you can almost
assume a 5 point jump in share price.

For those investors who are looking for growth, without the
scary day-to-day swings in share price, and want to fill in
the low-tech portion of your portfolio, you may want to look
at shares of fuzzy wuzzy Koala Corporation (KARE). They are
not located near the zoo.

Koala, based in Denver, is a designer, producer and worldwide
marketer of family-friendly commercial and consumer products.
Koala manufactures baby changing stations and high chairs;
children's activity products, such as activity tables and
activity carpets; and children's modular play equipment. Koala
products can be found in places such as airports, restaurants,
city and amusement parks, shopping malls, schools, and

The company sells to a wide range of businesses and public
facilities that serve customers and visitors who bring
children to their establishments. Customers include
Walt Disney World, The Mayo Clinic, Target Stores, McDonalds,
Pizza Hut, and Burger King franchises, among others.

Koala was founded in 1986, and began trading as a public
company in late 1993. At that point, the company had been
growing primarily through sales of its Baby Changing Stations

But in 1996, Koala started diversifying into other areas. The
company acquired the assets of a manufacturer of commercial-
use children's activities products in March 1996. Then, in
June of 1997, KARE bought indoor children's-equipment maker
Delta Play Ltd. In December of 1998, it bought Park
Structures, a producer of children's outdoor modular play
equipment. In 1999, the company bought two companies, Superior
Foam, a manufacturer of children's foam activity products in
March, and Smart Products, a provider of children's safety and
parental convenience products in September 1999.

Today, its Baby Changing Stations represented less than one-
quarter of the Company's sales in 1999.

To boost liquidity, increase analyst awareness, and to take
advantage of the stock's run up from around $18 in January to
$35 late last year, the company announced a two-for-one stock
split. However, on a post-split basis, Koala still only has
6.3 million shares outstanding. But, with Koala's grow rate of
more than 37 percent per year for the last five years, shares
should continue to do well, hopefully triggering more splits,
and thus, more shares to attract the larger institutions.
Shares currently trade for $16.

Koala's financials look squeaky-clean.

For the fourth quarter (ending December 31, 1999), sales
advanced 81 percent to $10.1 million compared with $5.6
million in the year ago period. KARE reported fourth quarter
earnings per share (EPS) of 21 cents (assuming dilution,
versus 17 cents per diluted share in the same period last
year. For the year, sales surged 94 percent to $37.1 million
compared with $19.1 million in 1998. Earnings rose to 78
cents per share, assuming dilution, compared to 60 cents in
fiscal 1998.

According to Zack's Investment Research, all eight firms who
cover KARE shares rate the stock a Strong Buy. Fiscal 2000
estimates are for 95 cents per share, and $1.12 for 2001.

Top institutional holders include Oppenheimer Funds, First
Union Corp., Pimco Advisors, Fidelity, and Sentry Investment

If the company make another great run this year, split its
shares again, it should attract more big players. Koala's
market capitalization is right is around $100 million, right
on the corner of most small-cap fund managers' radar screens.
As KARE's market cap increases, so will visibility on the
stock. The company is also going to need to raise cash if it
plans any further acquisitions. Currently, KARE has just

Due to its current liquidity concerns, however, shares of
Koala should only be considered for speculative investors.


EMLX - Emulex Corp. $208.00 +1.31 (+17.75 this week)

Emulex Corp is a leading developer and supplier of fiber channel 
technology, an ANSI standard communications interface that 
delivers unprecedented bandwidth, connectivity and reliability 
networking applications. They design three types of connectivity 
products: network access servers, print servers and high-speed 
fiber channel products. They sell their products worldwide to 
OEM and end users, through other distribution channels including 
value-added resellers, systems integrators and others. 

Most Recent Write-Up

"The clear market leaders in end nodes are Emulex and QLogic. 
They have the lions share of the OEM wins in my view." That's a 
quote from Dane Lewis, Senior Research Analyst on data storage 
and peripheral companies, with Robertson Stephens. The "clear 
market leader", that's quite a strong endorsement for a company 
who just happens to be one of our top plays as well. EMLX took 
off Monday and didn't stop until hitting a new high early this 
morning at $218.44. Traders began to take some profit at that 
time, which isn't all that unusual considering the recent run we 
seen in EMLX. It was very encouraging to see an orderly decline, 
as EMLX really traded in more of a sideways pattern for most of 
the day. It almost drifted lower, rather than the sharp volatile 
corrections seen many times when investors begin to take some 
money off the table. EMLX finished the day $2.69 to the good but 
was heading lower as the session ended. With the move the last 
two days, EMLX now has support at $203 and $200. If the NASDAQ 
can regain its footing tomorrow we would look for shares of EMLX 
to get back on track as well. 


Today was a wild ride for EMLX, opening at $209.75 and quickly 
tanking to $180.75 at about 11:00 EST, a free fall that gave 
the bulls a heartache.  Yet, it is that exact free fall that 
hardened bulls love to see, shaking out those nervous traders
who had their fingers on the sell button.  At that point, strong
volume lifted EMLX out of that rut quicker than it took to get
there, recovering throughout the day to close at $208.  This is 
a bullish indicator showing us EMLX's conviction to stay above
$200.  With resistance at $215, today's resilience may translate
to a retest of that level, and above that, $219.  Watch for 
the market's direction tomorrow to confirm this short term 

***March contracts expire in two weeks***

BUY CALL MAR-190 UEL-CR OI=138 at $25.63 SL=19.25
BUY CALL APR-210*UEL-DB OI= 16 at $29.75 SL=22.32 low OI		
BUY CALL APR-220 UEL-DD OI= 39 at $25.75 SL=22.75 

SELL PUT MAR-190 UEL-CR OI=138 at $23.63 SL=29.50
(See risks of selling puts in play legend)

Picked on Feb 13th at   $123.88    P/E = 346
Change since picked      +66.38    52-week high=$218.44
Analysts Ratings      3-4-0-0-0    52-week low =$  6.63
Last earnings 01/00    est=0.14    actual=0.23
Next earnings 04-25    est=0.17    versus=0.05
Average daily volume = 1.05 mln


Did Jim call the bottom?

Obviously that remains to be seen, but so far so good!

When you realize that no stock is immune to an investor exodus
(just look at Procter & Gamble or Conexant), the value of downside
protection is soon realized.  With stock selection critical in
uncertain market conditions, we focus on well-known issues and
strong technical charts.  Our goal is simple; consistent monthly
returns with low risk positions, thus we list the most favorable
"in-the-money" covered writes and deep "out-of-the-money" naked

Summary of Previous Picks:

Covered Calls: (Margin would double the listed Monthly Return)

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

SCMR    MAR     95   89.31  166.63  $5.69    6.5%
FNSR    MAR    110  106.43  145.50  $3.57    6.4%
INKT    MAR    125  119.63  172.81  $5.37    5.9%
LWIN    MAR     80   75.63   80.38  $4.37    5.9%
NEON    MAR     55   52.00   81.50  $3.00    5.8%
INSP    MAR    145  135.56  252.13  $9.44    5.7%
CRA     MAR    130  124.62  205.00  $5.38    5.7%
ITVU    MAR    105   98.25  150.94  $6.75    5.6%
SMTC    MAR     55   52.75   68.19  $2.25    5.6%
CHINA   MAR     95   90.12  139.88  $4.88    5.5%
TIBX    MAR     65   61.79  134.94  $3.20    5.3% Split 3 - 1
FIBR    MAR     55   51.75  125.00  $3.25    5.2%
BVSN    MAR    170  163.62  268.63  $6.38    5.2%
ENTU    MAR     65   61.88  138.44  $3.12    5.1%
PUMA    MAR     95   91.50  183.00  $3.50    5.1%
IMNX    MAR    130  122.50  229.50  $7.50    5.0%
CLRS    MAR     90   87.87  121.94  $2.13    4.6%
MUSE    MAR     87   82.50  197.69  $4.50    4.5% Split 2 - 1
DITC    MAR     62   58.94  115.00  $3.07    4.3% Split 2 - 1

Naked Puts:

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

SCMR    MAR     85   81.50  166.63  $3.50   13.3%
BVSN    MAR    160  156.25  268.63  $3.75   10.9%
NEON    MAR     50   48.44   81.50  $1.56   10.9%
FNSR    MAR     95   93.31  145.50  $1.69   10.8%
CRA     MAR    120  117.19  205.00  $2.81   10.3%
PUMA    MAR     90   87.87  183.00  $2.13   10.1%
MUSE    MAR     82   80.19  197.69  $2.32    9.9% Split 2 - 1
ENTU    MAR     60   58.31  138.44  $1.69    9.8%
CHINA   MAR     85   82.62  139.88  $2.38    9.3%
INSP    MAR    130  125.37  252.13  $4.63    9.3%
LWIN    MAR     70   68.19   80.38  $1.81    9.1%
ITVU    MAR    105  102.94  150.94  $2.06    8.9%
TIBX    MAR     58   56.83  134.94  $1.50    8.5% Split 3 - 1
CLRS    MAR     80   79.06  121.94  $0.94    7.4%
HLIT    MAR     95   92.50  138.06  $2.50    7.4%
IMNX    MAR    165  163.25  229.50  $1.75    7.3%
INKT    MAR    110  108.37  172.81  $1.63    7.3%
VRSN    MAR    185  182.25  203.00  $2.75    7.1%
INSP    MAR    180  178.19  252.13  $1.81    7.0%
MRVC    MAR     70   69.06  180.00  $0.94    5.9%
PROX    MAR     80   78.50  154.38  $1.50    5.2%


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.


AFCI - Advanced Fibre Comm.  $69.88  *** New 52-Week High ***

Advanced Fibre is a manufacturer of telecommunications systems
for the "local loop" between telephone service users and public
telephone networks worldwide.  AFC's flagship product is the UMC
1000 Third Generation Digital Loop Carrier (3GDLC).  This unit
is installed in a variety of network configurations to support
the varying geographic distribution of subscriber bases.  There
are more than 12,000 UMC 1000 systems installed in 23 countries
serving approximately 2.5 million access lines.  In the United
States, Sprint, WinStar, and Pac Bell, among others, deploy the
UMC 1000 system.  The system has also been deployed in a number
of other counties around the globe.

A recent article from the Robertson Stephens Tech 2000 Conference
offered a bullish outlook for Advanced Fibre and its industry.
In an in-depth interview, Paul Silverstein, Senior Analyst with
Robertson Stephens reported the sector is experiencing extremely
robust demand with two fundamental drivers; phenomenal end-user
growth and the need for bandwidth and services from communications
service providers.  He believes smaller companies such as Advanced
Fibre, that concentrate on one particular market segment of the 
communications equipment industry have the advantage of focus.
He also commented that Advanced Fibre has a product that not only
is extremely technologically capable but also has been out in the
field for several years now, deployed extensively throughout North
America and other countries, and the company has the benefit of an
impressive base of reference accounts.

This sounds like the foundation for a great future and investors
appear to agree.  The chart reflects a solid bullish trend with
little downside risk and our cost basis is well below the recent
trading range.

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

Sell Call APR 55   AQF DK  1372     20.13    49.75     7.3% ***
Sell Call APR 60   AQF DL  730      17.38    52.50     9.9%

Sell Put  APR 40   AQF PH  25        1.38    38.62     6.2%
Sell Put  APR 42   AQF PS  89        2.00    40.00     8.7%
Sell Put  APR 45   AQF PI  52        2.38    42.62    10.1% ***
Sell Put  APR 47   AQF PT  87        3.00    44.00    12.2%
Sell Put  APR 50   AQF PJ  165       3.75    46.25    14.6%

Chart =


BOUT - About.com  $90.00  *** Break-Out Coming? ***

About.com is the leading network of niche vertical sites for users
and marketers.  The network includes more than 700 highly targeted
environments, each overseen by a professional guide. Each vertical
niche provides a comprehensive customer experience including the
Internet's best link directories, original content, community
features and commerce opportunities.  The individual niche sites
are grouped into 20 main channels such as Finance/Investing,
Shopping and Sports.  As the network of verticals is grouped into
main channels, About.com can act as more of a "one stop shopping"
experience, than other major web sites devoted to one topic.  Its
structure therefore enables About.com to - serve all Internet
users, some of the time - resulting in broader reach, while
maintaining the advantage of targeted focus.  About.com also
provides multiple e-commerce opportunities throughout its network.

The E-networking Industry is getting a lot of attention right now
and the majority of stocks in this group are moving higher on
increased institutional buying.  About.com is also participating
in the rally and appears ready to try for a new all-time high.
We favor the recent bullish trend and this one-week speculation
play offers a conservative method to benefit from the sector

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

Sell Call MAR 80   AUB CP  236      11.38    78.62     5.9% ***

Sell Put  MAR 80   AUB OP  22        1.94    78.06    23.5% ***

Chart =


DITC - Ditech  $115.00  *** Leading-Edge Technology  ***

Ditech designs, develops and markets equipment used in building
and expanding telecommunications and cable communications
networks.  Their products are: echo cancellation equipment and
equipment that enables and facilitates communications over fiber
optic networks.  Echo cancellation products eliminate echo, which
is a significant problem in existing and emerging networks.  Their
optical communications products enable the implementation of
wavelength division multiplexing technology, which is becoming
more widely adopted by service providers to address network
capacity constraints.  Ditech's optical communications products
are designed to function either as stand-alone products or as a
complete system known as the Optical Path Solution.  To date, the
vast majority of its revenue has been derived from sales of its
echo cancellation products.

Ditech shares have rocketed over 1000% since the initial public
offering last summer and Robertson Stephens analyst Paul Johnson
says the company is poised for more growth in 2000.  He recently
raised his earnings-per-share estimates for the telecom equipment
maker and reiterated a "buy" rating after the company reported
strong fiscal third quarter results.  

Technically, the stock has been on the move since early February
when it broke-out of a consolidation area near $60.  A new deal
with Teleglobe (TGO) and the acquisition of Telinnovation, a
leading developer of voice enhancement and echo cancellation
technology, bolstered the rally.  Based on the outlook for the
company and its industry, we favor the issue for a long-term

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

Sell Call APR 90   DUI DR  25       31.63    83.37     5.5% ***
Sell Call APR 95   DUI DS  6        30.00    85.00     8.1%

Sell Put  MAR 87   DUI OF  15        1.00    86.00    14.1% ***
Sell Put  MAR 90   DUI OR  38        1.44    88.56    19.9%

Chart =


IMNX - Immunex  $229.50  *** 3-for-1 Split Coming!  ***

Immunex is a biopharmaceutical company that discovers, develops,
manufactures and markets innovative therapeutic products for the
treatment of human diseases including cancer, infectious diseases
and immunological disorders. The Company's major product lines
are Enbrel, Leukine, Novantrone and Thioplex. Enbrel is a soluble
tumor necrosis factor receptor used to reduce inflammatory
activity in patients with moderate to severe rheumatoid arthritis.
Leukine is a granulocyte-macrophage colony-stimulating factor that
is used to stimulate infection-fighting white blood cells.
Novantrone and Thioplex are chemotherapy drugs that are used to
treat pain in cancer patients. Immunex is also developing products
to address ailments such as inflammatory disease, infection,
multiple sclerosis, asthma and cancer.

The recent news for Biotech leader IMNX is an experimental new
asthma drug that is inhaled on a weekly rather than daily basis.
The new protein-based drug, Nuvance may offer an alternative to
current steroid-based treatments.  In early testing, the drug
appeared to prevent the allergic reaction that causes asthma.
Another recent development was the approval of NOVANTRONE.  The
drug was recommended for approval to slow the worsening of
neurologic disability and to reduce the relapse rate in patients
with clinically worsening forms of relapsing-remitting and
secondary progressive multiple sclerosis.

In this case, we simply favor the upcoming 3-for-1 split and the
potential for another rally prior to the actual dividend on March
20.  The recent consolidation offers a potential entry opportunity
and the cost basis near technical support makes the position even
more attractive.

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

Sell Put  APR 150  QUV PJ  91        4.63   145.37     6.3%
Sell Put  APR 155  QUV PK  0         5.5    149.50     7.4% ***
Sell Put  APR 160  QUV PL  32        6.38   153.62     8.4%

Chart =


ISSX - ISS Group  $121.06   *** Technicals Only! ***

ISS Group through Internet Security Systems, provides monitoring,
detection and response software that protects the security and
integrity of enterprise information systems.  Their SAFEsuite
family of products is designed to enforce information risk
management automatically in distributed computing environments.
Their products use an innovative Adaptive Network Security
approach that entails continuous security risk monitoring,
detection and response to develop and enforce an active network
security policy.  Products within the SAFEsuite family include
Internet Scanner, System Scanner, Database Scanner, RealSecure
and SafeSuite Decisions.  In addition, ISS offers professional
services that deliver comprehensive network and Internet security
solutions to customers.  ISS has licensed its network security
solutions to thousands of organizations worldwide, including firms
in the Global 2000, government agencies and major universities.

This issue has one of the better chart patterns in recent weeks
and with today's upgrade, the outlook is very favorable.  Warburg
Dillon Read analyst Jordan Klein just raised his price target on
the company to $160, based on the demand for Internet security
technology.  He also said the demand for company's services will
increase as business-to-business electronic commerce grows.  A
press tour in late March is expected to boost interest in the
company and with the current technical strength, this issue has
little chance of reaching our conservative cost basis.

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

Sell Call APR 105  ISU DA  98       24.88    96.18     6.3% ***
Sell Call APR 110  ISU DB  21       21.75    99.31     7.4%

Sell Put  APR 85   ISU PQ  0         2.56    82.44     6.6%
Sell Put  APR 90   ISU PR  0         3.63    86.37     9.0% ***
Sell Put  APR 95   ISU PS  0         4.75    90.25    11.3%

Chart =


ORCL - Oracle  $83.12  *** Earnings Run? ***

The Oracle Corporation supplies software products for information
management, and the world's second largest software company.  The
company's software products can be categorized into three primary
product families; Server Technologies, Application Development and
Business Intelligence Tools - Oracle Financial Analyzer, Sales
Analyzer.  In addition to software products, the company offers
consulting and systems integration services.  Oracle markets its
products and services domestically through its own direct sales,
and internationally through its subsidiaries.  Oracle acquisition
of Datalogix International enhanced their technology offering in
the consumer packaged goods industry, and, in 1998, the company
acquired Treasury Services Corporation to enhance their offerings
in the financial services industry.

Today's $8 move reached a new all-time high and the reason for the
rally may have been the company's announcement they will form an
online supply exchange for the convenience store industry.  The
exchange, dubbed RetailersMarketXchange.com is designed to reduce
costs for retailers and independent stores that purchase more than
$200 billion of supplies a year by creating a central marketplace.
It is the world's first global exchange for the convenience and
small-store retailing market and the developers plan to leverage
the Internet to create an efficient purchasing and communications
exchange.  Oracle is expected to earn millions of dollars in fees
from maintaining online exchanges and collecting fees from each

Regardless of the news, a large part of the current interest may
be due to the upcoming earnings announcement.  Oracle is expected
to report earnings on Tuesday, March 14 and the momentum from the
recent rally should support the issue through any post-earnings

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

Sell Call MAR 70   ORY CN  15957    14.88    68.25     8.7% ***

Sell Put  MAR 67   ORY OU  1905      0.88    66.12    16.5%
Sell Put  MAR 70   ORY ON  7139      1.31    68.69    20.7% ***
Sell Put  MAR 72   ORY OV  1525      1.75    70.25    24.8%

Chart =


PUMA - Puma Technology  $183.00  *** Another Split! ***

Puma Technology develops, markets and supports mobile device
management and synchronization software designed to improve the 
productivity of handheld computers, smart phones and other
wireless personal communications platforms.  The acquisition of
NetMind gives the company a complete e-commerce strategy at a
time when businesses are trying to offer consumers more wireless
and mobile data services.  With Puma's unique, leading-edge data
synchronization technology, the e-commerce technology from NetMind
and the technology for rendering Web pages on hand-helds from the
August acquisition of Proxinet, Puma is poised to become the next
leader in the industry.

The recent big news for Puma was a smaller-than-expected loss in
quarterly earnings and the split announcement.  Puma's Board of
Directors has approved a two-for-one split of its common stock.
The stock split will be affected as a dividend and shareholders
of record as of March 8, 2000 will receive a stock certificate
representing one additional share for each share of common stock
held on the record date.  These certificates will be distributed
on March 22, 2000.

The rally has already been significant and today's move to a new
all-time high suggests the trend is intact.  A transition to the
next trading range is forthcoming and we favor ITM positions and
a conservative approach in this bullish momentum play.

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

Sell Call APR 135  YCQ DG  21       57.25   125.75     5.1% ***
Sell Call APR 140  YCQ DH  21       53.88   129.12     5.8%

Sell Put  APR 115  PUP PC  5         3.75   111.25     6.4%
Sell Put  APR 120  PUP PD  45        4.38   115.62     7.4% ***
Sell Put  APR 125  PUP PE  47        5.75   119.25     9.4%

Chart =

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