Option Investor

Daily Newsletter, Wednesday, 03/15/2000

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The Option Investor Newsletter                Wednesday  3-15-2000
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)
       3-15-2000           High     Low     Volume Advance Decline
DOW    10131.40 + 320.20 10180.20  9776.50 1,305,979k 1,914  1,122
Nasdaq 4,582.62 - 124.01  4758.44  4553.92 1,937,803k 1,544  2,740
S&P-100  749.30 +  18.55   753.34   729.65    Totals  3,458  3,862
S&P-500 1392.14 +  32.99  1397.99  1356.99            47.2%  52.8%
$RUT     558.87 -  14.12   576.40   556.43
$TRAN   2521.71 + 139.94  2543.87  2382.34
VIX       25.06 -   1.37    29.13    24.08
Put/Call Ratio       .54

The "Old" Wall Street Two-Step

What's this?  The Dow is up big and the Nasdaq down big.  Who 
changed the rules when I wasn't looking!  I thought we were 
supposed to be buying "new" economy stocks.  Honestly, that 
has been my favorite part of watching CNBC for the past month 
and hearing the phrase "new" economy.  Analysts and traders 
alike have been acting as if there was a major shift in the 
way we will invest for the next millennium.  Now, I am the first 
to admit that I have been having a blast trading the "new" 
economy stocks for months now, but at some point money will 
shift to another area.  You can bank on it.  Ask anyone who 
owned Biotech this week about the shift that has gone on.  We 
have been taking a hard look at the markets this week in the 
office and the prevailing wisdom says "yeah it looks like a 
shift, but it's hard to fathom ahead of earnings".  The bottom 
line is, expect the volatility to continue over the next month 
or so.  But where there is volatility, there is opportunity!

The DJIA did there best to provide a jump-the-gun rally ahead 
of the PPI report due out tomorrow, but the Nasdaq sat this 
one out.  A plus 320-point move on the DJIA is just what the 
doctor ordered and put this "old" economy back above the 10,000 
level.  Today's close was at 10,131.41, up over 320 points as 
it gave a licking to the "new" economy Nasdaq.  That index was 
down 123.95 to 4582.68.  We are looking at a nearly 500 point 
loss on the Nasdaq this week alone.  The good news is that we 
hit the 10% correction level.  Are the buyers ready to join in 
on a solid PPI report tomorrow?  We will see, but if the PPI 
is taken as negative, we could see some more Nasdaq support 
levels broken, which may really scare some people.  It has been 
awhile since traders have really felt fear in the Nasdaq like 
we have this week.  Here are the support levels that traders 
will be watching in case of a morning disaster.



I don't think it will be quite that ugly though.  The $VIX had 
a little scare today, reaching up to 28, but closed in the middle 
of the road at 25.05.  The Nasdaq isn't tanking because of any 
fundamental shortcomings.  Instead, the mass exodus is from 
traders wanting to cycle quickly over to where they see the next 
move taking place.  Today the sentiment was to go back to the 
DJIA.  Financials, Chemicals, Banks, Drugs and Cyclicals may be 
perceived as the best chance to double your money in the next 6 
months.  It validates the popularity of the stock market as no 
one wants to sit out, just rotate to the next hot spot.  Again, 
whether this is a short-term fad or the place to be over the 
next quarter or two is yet to be seen.  As much as I want to 
go after some of the NYSE stocks like I did today, I still have 
one eye on the Nasdaq at any given time.  Some of these stocks 
have already correct between 30-50%.  It doesn't take long for 
traders to sniff out a tech-bargain.  

The point losers on the Nasdaq today read like a horror story.  
CMVT -26.13, EPNY -61.94, NAVI -58.00, CHKP -38.19, CLRN -27.50, 
AKAM -29.44, MRVC -29.38, and RBAK -24.50.  The amazing part of 
this wave of selling is that a lot of these stocks are still 
higher than they were at the start of last month.  Volume on 
the NYSE was heavy at 1.3 billion shares, confirming that there 
were buyers on Wall Street.  The Nasdaq volume was 1.93 billion 
which is solid, but not over 2 billion like we had been seeing 
even a week ago on the advance.  This kind of action where the 
volume is leaning to the strong market is indicative of a 
healthy market, not one of panic.  You may remember the Nasdaq 
had been the market seeing the strong relative volume.  Maybe 
now it's the DJIA's turn.

The big talk on the Street today was the speculation of a
merger/alliance between EBAY and YHOO.  CNBC initially broke 
the news Tuesday evening, sending EBAY's shares from its Tuesday
close of $211 to as high as $241 in after-hours trading.  Yet
today, neither company commented on the what they called 
"speculative reports."  In fact, reports today indicated that 
talks have been broken off and both stocks were hit hard in 
trading.  EBAY made an about-face, quickly giving up overnight
gains and then some, closing at $189.50, off $21.50.  YHOO fared
slightly better, selling off $10.25 to close at $158.50.  This 
merger speculation is nothing new.  Ever since the AOL-TWX merger
announcement, YHOO's name has been floating around as it became 
apparent that a merger may be necessary to compete with its 
biggest rival, AOL.  Although it would be advantageous for EBAY 
in that they would gain a much greater viewing audience, EBAY's 
significant relationship with AOL could make for a difficult 
negotiation.  Not to mention the big price tag that comes along
with the deal.  In a deal that would be valued around $30 bln,
the fact that YHOO needs EBAY more than EBAY needs YHOO could 
bring an even higher premium.  

As INTC's stock continues its tear upward, today's announcement
that they would acquire Denmark's GIGA A/S drove INTC up another
$2.31 to $120.19.  GIGA is a manufacturer of network components,
such as high speed communication chips used in optical networking
and in directing internet traffic.  This deal, to be done for 
$1.25 billion in cash, should give INTC greater capacity for 
designing and manufacturing fiber-optic infrastructure, which 
translates to faster internet access.  In a company press release,
Mark Christensen of Intel's Network Communication Group said that
this acquisition would be beneficial for the "rapidly growing 
demand for high-bandwidth communication infrastructure."  GIGA
would become an Intel subsidiary within Level 1 Communications.
GIGA was up 23.6% to 1,100 Danish Krones in European trading.

On a severe down day for internet stocks, AMZN was off $1.88 to
$63.75, driven by negative comments from a Paine Webber analyst.
Sara Farley revised her 12-month price target for AMZN from $74
to $68 and reiterated Paine Webber's "neutral" stance on the 
stock.  As a former high flier in the internet sector, AMZN's
jets have cooled tremendously, declining steadily for the past
three months.  Initially, AMZN broke out to the forefront and 
became the darling of the internet sector for investor and 
traders alike.  Yet, as other companies catch up with AMZN, 
stronger competition has made it more difficult for AMZN to 
continue to increase its earnings the way it has in the past.  
AOL's new alliance with Sears poses another threat to AMZN.
Farley also mentioned that higher interest rates in the future
will weigh upon AMZN's recent debt offering, affecting the 
bottom line.

ORCL beat the Street yesterday, coming in with 3rd quarter 
earnings of $0.17 a share versus the consensus estimate of 
$0.13.  They even beat the whisper number of $0.15.  The company 
attributed their increased performance to strong database 
software sales.  With 3rd quarter profit soaring 80%, the 
market was happy with ORCL's effort to cut costs.  All 
this good news was in addition to the announcement on Tuesday
that ORCL would team up with HKT, Cable & Wireless HKT Ltd.,
to offer business-to-business e-commerce services in China, a
market that has proved to be elusive to American companies.
ORCL traded up $1.63 to $78.63.

Those of you in the market this week may have already turned 
your attention to the NYSE after the buy-the-dip mentality 
hasn't been working.  I have been left holding the bag on my 
share of losing trades this week and it didn't take long for me 
to turn my attention elsewhere.  The question is, how will  
tomorrow's pre-market PPI report affect this shift?  Analysts are 
expecting a 0.5% increase.  If it comes in lower than expected 
you may see a Nasdaq resurgence.  Don't get caught running back 
in during amateur hour though.  The NYSE looked really strong 
today and you don't want to be caught in the wrong issues.  
When I look at what has been strong lately, it is names like 
DELL, INTC, AXP, and heaven-forbid, even CPQ has been rallying.  
All "old" school names.  Other things to watch tomorrow will 
be the opening level.  We have gapped one way and then traded 
the other all week.  I will be real leery about rushing in 
tomorrow.  If it is on the Nasdaq, make it confirm itself in  
the morning.  If it is on the NYSE, it probably won't spurt 
out of reach.  

Most of my losers this week have been in stocks that carried 
more risk than reward.  After all, we are in earnings warning 
season so play it safe until you are sure.  My gut instinct?  
The Nasdaq will bounce back and forth making for great plays, 
but it could be time for the "old" school names to shine. 

Ryan Nelson
Asst. Editor


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Arch Communications: Can it and Paging Networks Survive?
By: Matt Paolucci

The future of telecommunications, especially wireless, is getting
more exciting every day. The things we can accomplish without
even setting foot in the office is astounding compared to just a
few years ago. Other than keeping a physical address for mail
delivery and a server for your Web site, practically every other
function can now be achieved by way of a remote device. That's
exactly what Arch Communications (APGR) is thinking.

Arch is the #2 independent paging company in the U.S. Arch became
#2 through its 1999 purchase of private-held MobileMedia. With
its pending merger with Paging Network (PAGE), expected to close
by mid-year, it will become #1 independent paging company in the
world, with over 16 million subscribers and annual revenues
exceeding $1.7 billion. Arch, by itself, offers four kinds of
paging services: digital display, alphanumeric display, tone-
only, and tone-plus-voice, to some 7 million subscribers. It
operates in all 50 US states, Washington DC, and in the
Caribbean. Arch markets its pagers through more than 300 offices
and retail stores, on the Internet, and through independent
resellers, sales agents, and retailers.

Arch was recently chosen by Internet services giant America
Online Inc. (AOL) to provide two-way wireless messaging
capabilities for its new AOL Mobile Messenger service and plans
to offer AOL's e-mail and AOL Instant Messenger (AIM) services 
to consumers using devices enabled with APGR's messaging
capabilities. The companies signed a three-year agreement.

Arch has also signed an deal with The Free Network, a leading
multi-level marketing company serving primarily the
telecommunications industry. Under the agreement, The Free
Network's approximately 55,000 independent representatives will
market Arch products to current and potential customers. The
program is scheduled to launch mid-March.

Last week, the company announced a strategic alliance with
MyWay.com, a leading developer and distributor of custom portal
solutions, to allow Arch customers to wirelessly access and
customize a wide variety of content and applications on the World
Wide Web, including national and local news and weather, stock
quotes, email and personal organizer applications, through Arch's
Web site.

The company has also been hard at work reducing its debt. On
March 9, the company completed a transaction with bondholders in
which Arch issued roughly 10 million shares of Arch common stock
in exchange for $135 million of 10.875 percent Senior Discount
Notes due in 2008.

The big question is: Can Arch Communication and Paging Networks
survive and thrive in the highly-competitive wireless services

Sure, the combined company will have 16 million subscribers, more
than $1.7 billion in annual revenues, and $535 million in EBITDA
(earnings before interest, taxes, depreciation and amortization).
It will also have 2,300 salespeople pushing their products and
services. Lastly, the two companies estimate that synergies
created by the merged entity will amount to $80 million over the
next two years. Not bad.

On the other hand, the combined company will have $1.8 billion in
debt, 172 million shares outstanding, and a paging product ill-
equipped to compete with popular devices made by Palm Inc.
(PALM), Nokia Corp. (NOK), and Ericsson Telephone (ERICY).

Even though the merger between Arch and Paging Networks has some
attractive qualities, the marriage was probably necessary just to
compete. It will certainly be an uphill battle for the new Arch
Communications, in my opinion. With both companies consumed in
debt (with high interest rates, to boot), facing stiff
competition, a lack of Wall Street interest in the combination,
and an obsolete product, it may be best to do the shareholders 
of the new company a favor by taking the 16 million subscribers 
and seeing who shows up at the door with cash to acquire them.


AFCI - Advanced Fibere Communications $77.63 +2.00 (-2.19)

Advanced Fibre Communications develops, manufactures, and 
supports the Universal Modular Carrier 1000 (UMC), a multi-
feature digital local-loop carrier system.  This product 
enables telecommunications providers to deliver voice, video, 
and data on wireline or wireless systems to smaller line-
sized markets. Global clients include Alltel, Sprint, France 
Telecom, and Cable & Wireless Panama. 
Most Recent Write-Up

The wide intraday swings are still in full force.  AFCI 
experienced spreads of 10+ pts during past two days.  There's 
not any "official" news regarding the scuttlebutt about a 
potential buyout of AFCI by CSCO, but again it may account for 
the topsy-turvy movement and volume spikes.  This volatile 
momentum play continues to provide lots of room for entries 
and exits.  Although in consideration of the present market 
conditions, it'd be wise to wait for an upward bounce off the 
5-dma (currently at $77.09) before opening new call positions.  
If the stock dives the next stop is the $68 to $72 vicinity 
just below the 10-dma ($72.13).  Aspect Communications announced 
yesterday it signed a new multi-year contract with France Telecom 
to provide its UMC1000 Multi-Service Access Platform.  The terms 
also allow for joint development of products if the need arises.  
This award was well received by John Schofield, AFC's president 
and CEO, who boosted that "France Telecom has been a key, 
strategic AFC customer since 1995" and "this contract exemplifies 
AFC's new sales strategy of focusing on select markets and 


What I like about AFCI is that it didn't follow suit with the
NASDAQ.  In fact, it bucked the trend with a $2 gain.  With very
little good news for the NASDAQ, AFCI is a bright spot.  In the
final trading moments, AFCI rounded up slightly on the heaviest
volume of the day.  So for tomorrow, assess the PPI's impact on
the market and watch for AFCI to hold this current level during
amateur hour.  By that time, we should have an idea of where we
are going.  If the PPI comes in benign, AFCI could really be the 
play of the day.

BUY CALL APR-70 AQF-CN OI= 453 at $ 8.38 SL= 5.75
BUY CALL APR-75*AQF-CO OI= 951 at $ 4.25 SL= 2.50
BUY CALL APR-80 AQF-CP OI=1036 at $ 1.88 SL= 0.75
BUY CALL JUN-80 AQF-FP OI= 181 at $18.88 SL=14.00 

Picked on Feb 27th at    $57.44    P/E = 19
Change since picked      +20.19    52-week high=$89.38
Analysts Ratings      4-8-1-0-0    52-week low =$ 6.75
Last earnings 12/99   est= 0.09    actual= 0.10
Next earnings 04-20   est= 0.07    versus= 0.04
Average daily volume = 1.86 mln


The Big Sell-Off Continues...

Yet all of our positions in the Summary below remain at maximum
profit.  Only when the Market corrects sharply can the true
value of a conservative covered write (or deep OTM naked put) 
be appreciated.  The current high-volatility conditions do offer
the potential for tremendous profit, but at great risk.  We prefer
to focus on a high probability of a reasonable profit with low
risk and reduced potential for loss.

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

ORCL    MAR     70   68.25   78.63  $1.75    8.7%
SCMR    MAR     95   89.31  135.63  $5.69    6.5%
FNSR    MAR    110  106.43  124.75  $3.57    6.4%
INKT    MAR    125  119.63  195.88  $5.37    5.9%
BOUT    MAR     80   78.63   89.00  $1.38    5.9%
LWIN    MAR     80   75.63   83.88  $4.37    5.9%
NEON    MAR     55   52.00   83.47  $3.00    5.8%
INSP    MAR    145  135.56  195.13  $9.44    5.7%
CRA     MAR    130  124.62  146.00  $5.38    5.7%
ITVU    MAR    105   98.25  138.25  $6.75    5.6%
SMTC    MAR     55   52.75   57.13  $2.25    5.6%
CHINA   MAR     95   90.12  106.50  $4.88    5.5%
TIBX    MAR     65   61.79  119.25  $3.20    5.3% Split 3 - 1
FIBR    MAR     55   51.75  120.00  $3.25    5.2%
ENTU    MAR     65   61.88   99.13  $3.12    5.1%
PUMA    MAR     95   91.50  164.00  $3.50    5.1%
IMNX    MAR    130  122.50  170.56  $7.50    5.0%
CLRS    MAR     90   87.87  115.00  $2.13    4.6%
MUSE    MAR     87   82.50  150.00  $4.50    4.5% Split 2 - 1
DITC    MAR     62   58.94   92.75  $3.07    4.3% Split 2 - 1
BVSN    MAR     56   54.54   70.25  $1.46    3.5% Split 3 - 1

AFCI    APR     55   49.75   77.63  $5.25    7.3%
DITC    APR     90   83.38   92.75  $6.63    5.5%
PUMA    APR    135  125.75  164.00  $9.25    5.1%
ISSX    APR    105   96.19  103.00  $6.82    4.9%

Naked Puts:

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

BOUT    MAR     80   78.06   89.00  $1.94   23.5%
ORCL    MAR     70   68.69   78.63  $1.31   20.6%
DITC    MAR     87   86.00   92.75  $1.00   14.1%
SCMR    MAR     85   81.50  135.63  $3.50   13.3%
BVSN    MAR     53   52.08   70.25  $1.25   10.9% Split 3 - 1
NEON    MAR     50   48.44   83.47  $1.56   10.9%
FNSR    MAR     95   93.31  124.75  $1.69   10.8%
CRA     MAR    120  117.19  146.00  $2.81   10.3%
PUMA    MAR     90   87.87  164.00  $2.13   10.1%
MUSE    MAR     82   80.19  150.00  $2.32    9.9% Split 2 - 1
ENTU    MAR     60   58.31   99.13  $1.69    9.8%
CHINA   MAR     85   82.62  106.50  $2.38    9.3%
INSP    MAR    130  125.37  195.13  $4.63    9.3%
LWIN    MAR     70   68.19   83.88  $1.81    9.1%
ITVU    MAR    105  102.94  138.25  $2.06    8.9%
TIBX    MAR     58   56.83  119.25  $1.50    8.5% Split 3 - 1
CLRS    MAR     80   79.06  115.00  $0.94    7.4%
HLIT    MAR     95   92.50  119.00  $2.50    7.4%
IMNX    MAR    165  163.25  170.56  $1.75    7.3%
INKT    MAR    110  108.37  195.88  $1.63    7.3%
VRSN    MAR    185  182.25  194.75  $2.75    7.1%
INSP    MAR    180  178.19  195.13  $1.81    7.0%
MRVC    MAR     70   69.06  129.00  $0.94    5.9%
PROX    MAR     80   78.50  140.00  $1.50    5.2%

AFCI    APR     45   42.63   77.63  $2.38   10.1%
ISSX    APR     90   86.38  103.00  $3.63    9.0%
IMNX    APR    155  149.50  170.56  $5.50    7.4%
PUMA    APR    120  115.63  164.00  $4.38    7.4%


We list favorable "in-the-money" covered write and "out-of-the-
money" naked put candidates that offer conservative entry points 
into technically bullish charts, with reasonable monthly returns. 

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.  $77.62  *** 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 analysts
from other brokerages agree.  Today Lehman Brothers upgraded the
issue and raised the price target to $100 a share based on a new
multiyear contract with France Telecom for access equipment.  The
chart reflects a solid bullish trend with little downside risk and
our new cost basis is still well below the recent trading range.

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

Sell Put  APR 45   AQF PI  243       1.19    43.81     5.8% ***
Sell Put  APR 47   AQF PT  104       1.63    45.38     7.8%
Sell Put  APR 50   AQF PJ  306       2.06    47.94     9.6%

Chart =


ASYT - Asyst Technologies  $50.31  *** Hot Chip Sector! ***

Asyst Technologies develops, manufactures and markets systems
utilizing isolation technology, material tracking products and
factory automation solutions used primarily in clean rooms for
semiconductor manufacturing.  Asyst addresses the requirements
for increased levels of cleanliness, facility utilization,
control and cost-effectiveness in semiconductor manufacturing
through its SMIF mini environment system, its SMART-Traveler
material control system, robotics and its family of automation
software products and solutions.

We selected this issue based on the company's potential for
expansion in a sector that is expected to grow exponentially
over the next two years.  With multimillion-dollar contracts
from Silterra Malaysia and 1st Silicon for its new fab-wide
automation solution, the company has demonstrated the global
demand for its products.  They expect capitalize upon that
strategic region, a fast-growing center for semiconductor
fabrication and plan to develop other relationships after the
new field service office is fully operational.  We feel that
the issue has great future potential and the recent technicals
suggest our cost basis offers a favorable price to enter a new

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

Sell Call APR 40   QQY DH  735      13.13    37.18     6.2% ***

Sell Put  APR 35   QQY PG  50       1.63     33.38    11.4% ***
Sell Put  APR 40   QQY PH  77       2.75     37.25    17.6% 

Chart =


INKT - Inktomi  $195.88  *** Wireless Expansion! ***

Inktomi develops and markets scaleable software applications made
to enhance the performance and intelligence of large-scale
networks.  Traffic Server is Inktomi's large-scale network cache
application designed to address capacity constraints in high-
traffic network routes.  The Traffic Server software speeds
traffic flow on the Internet by storing information closer to
the user.  Traffic Server increases effective bandwidth, adding
speed, reliability and scalability to the network.  Their Internet
search engine application enables Internet portals and other
Website customers to provide online search services to end-users.
The Internet shopping engine, Inktomi's newest application, was
initiated with the acquisition of C\\2\\B Technologies.  The
shopping engine is designed to enable end-users to quickly and
easily locate products of interest, compare features and prices
among products, and locate and purchase such products through
participating merchants.

Inktomi recently unveiled a major new strategy to deliver more
online content to cellular phones and other wireless devices.  In
a new initiative involving alliances with six other technology
companies, Inktomi will seek to accelerate the deployment of
wireless devices equipped with Internet content and commerce
functions.  The wireless effort comprises their portal services
and network products, and includes companies such as AirFlash,
Portal Software and Cap Gemini, Sun Microsystems, Hewlett-Packard,
and Gwcom.  Inktomi plans to build superior wireless solutions
and deliver data and services customized for the specific needs
of mobile users.  The company is expected to invest significantly
in this growth area, leveraging their leadership position in the
Internet infra-structure.  

Goldman Sachs recently offered a new "buy" rating on the company
with a spot on the "recommended" list and it appears that most
investors agree with their assessment.  We are going to continue
selling puts on the issue as long as the bullish trend is intact.

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

Sell Put  APR 135  KYQ PG  199      3.13    131.88     6.1%
Sell Put  APR 140  KYQ PH  398      4.00    136.00     7.6% ***
Sell Put  APR 145  KYQ PI  117      5.13    139.88     9.5%
Sell Put  APR 150  KYQ PJ  429      6.25    143.75    11.3%

Chart =


MU - Micron  $113.00  *** On The Move! ***

Micron Technology and its subsidiaries, principally design,
develop, manufacture and market semiconductor memory products,
primarily DRAM, principally for use in personal computers and
custom complex printed circuit board, memory module and system
level assemblies.  Their primary semiconductor products are
dynamic random access memory components and through Micron
Electronics (MUEI), its 63%-owned subsidiary, the company
offers PC systems, notebooks and servers.

This issue has been on a meteoric rise in the last few weeks and
since Microsoft's Windows 2000 launch in February, business has
been better for the whole group of hardware producers.  Analysts
are bullish on the company and Salomon Smith Barney offered the
most recent upgrade, shifting its view to an "outperform", based
on firmer DRAM pricing.  Last Friday, Morgan Stanley Dean Witter 
reiterated their "outperform" citing Micron's favorable outlook
for the second half of this year.  Investors were advised to buy
the stock on any weakness.  In early March, Goldman Sachs also
reiterated their "market outperform" rating and that helped boost
the issue to it's current levels.

We simply favor the opportunity to be paid for trying to own the
issue at a discounted price.

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

Sell Put  APR 80   MU PP   1659     1.94     78.06     6.5%
Sell Put  APR 85   MU PQ   1097     2.75     82.25     8.9% ***
Sell Put  APR 90   MU PR   1583     3.88     86.13    12.0%

Chart =


NEON - New Era Of Networks  $83.50   *** New Trading Range ***

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 recently
achieved a new all-time high.  With the new deals this week (NTT
data and Cognizant Technology Solutions) and the ongoing supply
pact with IBM, the issue has the potential to continue well into
the triple digits.  Our conservative position should provide ample
room for any future consolidation.

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

Sell Call APR 65   QNO DM  583      22.25    61.22     5.1% ***

Sell Put  APR 50   QNO PJ  100       1.25    48.75     5.7%
Sell Put  APR 55   QNO PK  242       2.06    52.94     9.0% ***
Sell Put  APR 60   QNO PL  85        3.25    56.75    13.4%
Sell Put  APR 65   QNO PM  187       4.76    60.24    18.2%

Chart =


NXTV - Next Level Communications  $160.00  *** Another Player? ***

Next Level designs and markets high-speed, high-volume, also
known as broadband, communications equipment that enables
telephone companies and other communications service providers
to cost-effectively deliver a full suite of voice, data and video
services over the existing copper telephone wire infrastructure.
Service providers deploying the equipment can either offer voice,
data and video services in a single product offering or offer each
service separately depending on subscriber demand and the service
providers' objectives.

The recent merger discussions between Deutsche Telekom, Qwest and
U.S. West has brought new interest to other companies in the group
and Next Level is one of the premier service providers in that
industry.  Deutsche Telekom has been in talks to acquire Qwest and
U.S. West, and Qwest recently announced it was in discussions to
buy a minority stake in Next Level.  The meetings are in the final
stages but a deal has not been finalized.  Sources say that both
Qwest and U S West have been looking to roll-out services such as
high-speed data and video over their existing infrastructure and
now the opportunity may become intermingled in the merger plans.

With the additional investor attention on this sector, the issue
should have little trouble remaining above our conservative cost

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

Sell Call APR 125  NUX DE  42       42.38   117.71     5.1% ***

Sell Put  APR 115  NUX PC  15        4.38   110.63     9.9% ***
Sell Put  APR 120  NUX PD  5         5.50   114.50    12.1%
Sell Put  APR 125  NUX PE  10        7.00   118.00    14.7%

Chart =


SFE - Safeguard Scientifics  $255.00  *** 3-For-1 Split Soon! ***

Safeguard Scientifics is a diversified information technology
company that develops, operates and manages emerging growth
information technology companies.  Safeguard is focusing on
emerging opportunities in eCommerce, enterprise applications,
and network infrastructure, which are expected to benefit from
the growing use of the Internet as a fundamental business tool.
Safeguard's reportable segments consist of general corporate
operations, CompuCom, and Tangram.  General corporate operations
consist of developing, operating, and managing emerging growth,
information technology partnership companies, and participating
in the management of venture capital funds.  CompuCom's daily
operations include sales of distributed desktop computer products,
and configuration, network integration, and technology support.
Tangram's operations include the design, development, sale, and
implementation of enterprise-wide asset tracking and software
management solutions.

Internet incubators are hot and shares of Safeguard have risen
significantly in recent weeks on strength in the IPO market and
a recent price upgrade.  Last week, J.P. Morgan gave the company
a "buy" rating and set its price target at $378 per share, based
on the their growing core of Internet investments and the ability
to enhance the values of those ventures.  Large, well-established
companies such as Safeguard are generally more involved with their
investments, offering logistical support and driving the companies
harder, which theoretically gives them an even bigger edge in the
expanding market.

A 3-for-1 stock split is also the works and the company recently
filed with securities regulators to sell 10 million shares of
common stock, the proceeds of which would be used to acquire more
stakes in Internet infrastructure companies.  The pay date for the
split is on or about March 20, 2000.

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

Sell Put  APR 175  SFV PO  28       3.38    171.63     5.1%
Sell Put  APR 180  SFV PP  77       4.25    175.75     6.3% ***
Sell Put  APR 185  SFV PQ  25       5.00    180.00     7.3%
Sell Put  APR 190  SFV PR  47       6.00    184.00     8.7%

Chart =


TGNT - Teligent  $90.38  *** Growing Telecom Provider ***

Teligent is a facilities-based communications company offering
small and medium-sized business customers local, long distance,
high-speed data and dedicated Internet services over digital
SmartWave local networks.  These networks integrate point-to-point
and point-to-multi-point wireless technologies with traditional
broadband wire-line technology.  Teligent offers these services
using SmartWave local networks across the country.

The system is simple.  TGNT places a small microwave antenna on
the roof of a customer's building.  When the customer picks up the
telephone, accesses the Internet or activates a videoconference,
the signal travels through Teligent's equipment and the rooftop
antenna, which sends voice, data and video signals to a nearby
base station, where the signals are communicated to a broadband
switching center and then to their final destination.

Teligent shares moved into a new trading range last week after it
posted a smaller-than-expected loss in its fourth quarter.  The
big news was the company's infrastructure growth.  In the quarter,
Teligent installed nearly 90,000 lines, more than double the lines
installed during the third quarter.  The number of lines installed
in the last three months of 1999 exceeded the total number of all
lines installed during the company's history and the incredible
expansion is expected to continue.

The majority of analysts tracking the stock maintain a "buy" or
"strong buy" recommendation and the most recent upgrade was issued
yesterday.  We simply favor the break-out above February's trading
range and our cost basis offers a favorable entry point to open a
conservative position.

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

Sell Call APR 80   TNU DP  26       15.13    75.25     5.2% ***

Sell Put  APR 70   TNU PN  14        2.06    67.94     8.4% ***
Sell Put  APR 75   TNU PO  44        3.38    71.63    11.5%
Sell Put  APR 80   TNU PP  53        5.13    74.88    13.6%

Chart =

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