The Option Investor Newsletter Wednesday 3-29-2000 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) ****************************************************************** 3-29-2000 High Low Volume Advance Decline DOW 11018.70 + 82.60 11101.50 10910.80 1,046,973k 1,613 1,337 Nasdaq 4,644.67 - 189.22 4860.02 4641.01 1,736,965k 1,317 2,989 S&P-100 827.50 + 6.10 834.82 817.58 Totals 2,930 4,326 S&P-500 1508.52 + 0.79 1521.45 1497.45 40.4% 59.6% $RUT 543.00 - 16.04 561.77 541.36 $TRAN 2690.24 + 9.27 2721.96 2663.92 VIX 25.96 - 0.62 27.45 25.35 Put/Call Ratio .43 ****************************************************************** So When Did The Bears Awake From Hibernation? By Matt Russ It has been a difficult week thus far for the bulls, at least tech bulls. We watch, and in some cases, trade these glamorous high-fliers, sending them to astronomical levels in a blink of the eye. But, it's amazing how they always seem to plummet back to earth more quickly than they took off. Sellers rush for the exits with the "just get me out" mentality. The NASDAQ sell-off of the past two session started with Abby's comments (I promise that's all I'll say about her) and continued today in a stagnant trading session. Mark Mobius, emerging market guru with Templeton Funds, didn't help the bulls with comments that echoed concerns about valuations in the internet sector. And what happened to the "window dressing" that many thought would help prop up the market? As the day progressed, what was just a boring trading session deteriorated into a very, very ugly one for the NASDAQ. It was the kind of day that left investors with many questions and few answers. So let's try and break down what exactly happened today. In order to do so, let's take note of the indices' quarterly performances. Here are the year-to-date stats: DOW -4.2% and NASDAQ +10.95%. Today, the DOW gained 82.60, or 0.76%, and the NASDAQ was robbed of 189.20 points, or 3.91%, it's third biggest point drop. Talk among traders is that mutual funds and hedge funds has been of taking profits in their holdings that were profitable. And which ones were those? All those high-flying techs of the NASDAQ. It has indeed be a tremendous quarter for the techs and the biotechs as they shot out of the gates after the Y2K non-event. In conjunction with all of the negative rhetoric swirling around the internets, we can now see why they have deflated. Today, Mark Mobius further fueled investor fear when he said the extreme valuations in internet stocks have reached a "dangerous territory" and an internet crash could be eminent, which would impact global indices. He foresees some of these stocks dipping 50%-90% from current levels. This was enough to keep institutional money from making new wagers on the internets today, as "window dressing" seemed to turn to NYSE and DOW issues. Taking a technical look at the NASDAQ can be a little bit concerning. With the Internets having put in their tops for the time being and the chip sector selling off, it is beginning to look like we are in a sensitive trading range. Today, we sat and watched the NASDAQ throughout the day, overcome with boredom. The NASDAQ literally sat at 4651 for ten minutes around 1PM EST. We thought that our quote system had frozen but it hadn't. More bored than panicked, we hoped to see a late session bounce that would encourage investors. That bounce happened and took the NASDAQ above 4700. But to our dismay, it was just a headfake as the final hour of trading dragged the NASDAQ to close near its session lows at 4644. Needless to say, we were concerned. Looking at the NASDAQ chart below, we now have a double top just above the 5000 level and a double bottom in between at the 4455 level. That's the trading range and with such negative sentiment in the tech sectors, a move to the lower end certainly will create jitters among investors. There were few standouts for the NASDAQ. MSFT was up $2.88 to $107.19 and QCOM was strong all day and closed up $2.69 at $157.50, only after it quickly sold off $5.00 in the final moments. Another one of those standouts was ATHM. They struck a deal to give AT&T more control of ExciteAtHome. This new agreement will allow AT&T to increase their voting position to 74% from its current 56% level. There were also a few other new agreements announced by ATHM with such companies like Comcast and Cox Communications. By the day's end, it was good for a $3.38 gain for ATHM to close at $37.69. Also, AT&T had news late yesterday that the price range of their wireless tracking stock was set between $26-$32. After dipping down this morning, T took off in the afternoon to close near the day high of $60.25, up $0.38. Recent market leader INTC fell below key support of $135, closing down $3.81 at $131.88. A lot of this selling pressure can be attributed to the closing of Tiger Management's Jaguar Fund. Rumors have been circulating about that they have incurred heavy losses. Whether or not the reasoning behind the decision is just speculation, the fund had been doing poorly relative to its peers. It had already posted a 13% loss by March 1st, despite a broad NASDAQ advance during the first two months of the year. The Jaguar Fund had large positions in INTC and the liquidation process may be weighing heavily on it and other issues. And although INTC was a negative for the DOW, stellar performances from GE (+8.00), WMT (+4.63), HD (+4.06), and MRK (+2.44) held the DOW in positive territory. This shift into blue chip stocks is further evidence of a sector rotation and continues to help the DOW converge on the NASDAQ's YTD gains. Shares of GE closed at a new all-time high today, breaking over resistance at $160. This move was spurred by Prudential Securities raising their price target to $210. The brokerage house also reiterated their Strong Buy rating. This is just another example of the old school economy stocks making a comeback today. GE finished at $164. All of these developments in the DOW are reminiscent of last April's sector rotation that was mentioned in Sunday's Market Wrap. We will be closely watching this trend as we enter into earnings week next Monday. We were encouraged to see the DOW breakout and hold strong to close at 11018, above the key level of 11000. Here's an interesting piece of news about a public company going private. What? Yep, Ben & Jerry's Ice Cream. Who wants some Wavy Gravy or Chunky Monkey ice cream? Apparently not investors. The stock has been beaten down for years and has gained no investor respect. Enough is enough and the Board of Directors are in talks to take the company private. According to the New York Times, the tentatively agreed on price is at $38 a share. BJICA closed at $34.38, up $4.15. As we look forward, it appears that this convergence that has taken over the market will continue. The DOW is poised to go higher as investor search for stability and value. Will there be consolidation in the NASDAQ or will volatility take us for a ride in the trading range? Will investors become more picky when investing in tech stocks? We will be watching some of the better quality internet stocks such as YHOO and AOL for leadership as this tech shakeout may continue. Friday is the release of Personal Income and Consumption. The market will be looking to this for evidence of the "wealth effect." Let's not forget that the earnings season will be in full effect next week. It has been a rough couple of days for the NASDAQ, so let's look for a little relief in the next two trading sessions. Matt Russ Research Analyst *********** STOCK NEWS *********** TriZetto to buy IMS Health By: Matt Paolucci Wednesday, online health company TriZetto Group (TZIX) agreed to buy IMS Health (RZ:21.63) IMS, a provider of prescription drug sales analysis, for roughly $8.2 billion, creating an online B2B supplier of health-care information. Under the merger agreement, IMS shareholders will receive 0.4655 shares of TriZetto for each IMS Health share. Based on TriZetto's closing price Tuesday, the offer values each IMS Health share at $27.03, roughly 25 percent higher than the closing price of NYSE- traded IMS stock. Upon completion of the merger, the new company plans to issue three securities to all investors. First, IMS Health, representing the core IMS pharmaceutical market research and sales management businesses, will be issued as a tracking stock. Second, TriZetto, the high-growth application services provider (ASP) and Internet portal business, will be combined with Erisco, a provider of technology solutions supporting 70 million managed care lives. Third, a new security, Strategic Technologies, a leader in pharmaceutical relationship management, will be structured as a tax-free spin-off. So, in effect, shareholders of both IMS Health and TriZetto will ultimately own three securities: IMS Health, TriZetto, and Strategic Technologies. The new company will leverage Internet technology to provide integrated, digital health information and application services to healthcare constituents worldwide. HealthWeb, a global B2B Internet portal, enables healthcare providers, payors, and pharmaceutical companies to access applications, information, and e-commerce services. The pro-forma market capitalization of the new entity will be approximately $10 billion, and operate in more than 100 countries with over 9,000 employees. "The Internet is transforming healthcare," said Victoria Fash, IMS Health chief executive officer. "Our vision is to leverage technology to enable information-based business-to-business e-commerce across the global health care system, ultimately advancing world health. "Our strategy is TriZetto technology as the e-business engine, driving IMS digital assets linked by the HealthWeb global portal," she added. The deal is structured in such a way that Trizetto would use its stock, which has surged more than 500 percent since its public offering last October, to acquire a larger and more traditional concern, but it would appear that RX, which has dropped more than 20 percent recently, is actually acquiring TriZetto. IMS provides prescription drug research and analysis, and processes $165 billion of transaction records a month. The company had 1999 revenues of $1.4 billion, while TriZetto had $33 million of revenue in 1999. The transaction is expected to be completed in the third quarter of 2000. *************** PLAY OF THE DAY *************** CALL **** T - AT&T $60.25 +0.38 (+1.56 this week) With over 90 million customers, AT&T is the US's #1 Telecom company. The services offered by the company include long distance, wireless phone service, Internet access, and local and international phone services for businesses. In an attempt to dominate the domestic cable TV market, T will become the #1 US cable operator with its planned purchase of MediaOne. Most Recent Write-up Are you ready for the largest IPO in US history? Today, AT&T set the IPO terms for its wireless business. After being beaten down for the first two months of the year, T finally found support near $45 in late February. The upward move ran into some resistance near $55, but has left that level in the dust. The action over the past 2 days has brought T to its next level of resistance ($60) which is also the high seen back in November. There will likely be additional resistance at $62 and $64, as T attempts to move higher. The real driver for this play is the anticipated enthusiasm for T's IPO of their wireless services (see news below). Tentatively scheduled for April 26th, the IPO will occur in close proximity to earnings (4/25). The confluence of these two events should allow the Telecom giant to push higher as the dates approach. The strong move upwards over the past 2 weeks may require some profit-taking. Look for a pullback to $58 to trigger your entry, but wait for the bounce first. A more conservative entry would be to wait for T to close above resistance at $60 before throwing your hat in the ring. AT&T is looking to raise more than $11.5 billion by selling 360 million shares of a tracking stock to represent its wireless voice and data operations. Announcing the pricing today, T set an estimated price of $26-32 per share. After the offering, T will retain between 82 and 85 percent of the economic interest in the AT&T Wireless Group. If the recent 3Com/Palm spinoff is any indication, it could be an exciting month. Comments A typical "sell the news" event happened this morning when traders sold stock after AT&T announced they had set the price between $26-$32 a share for the wireless IPO. Sellers were quickly exhausted though and had a stellar afternoon rally to close right near the high. This story is still in its infancy and the memory of COMS spinning off Palm is still fresh in everyone's mind. We are expecting today's afternoon momentum to carry over for tomorrow. BUY CALL APR-55 T-DK OI=65347 at $6.38 SL=4.00 BUY CALL APR-60*T-DL OI=45397 at $3.13 SL=1.50 BUY CALL MAY-60 T-EL OI=14301 at $5.00 SL=2.50 BUY CALL MAY-65 T-EM OI= 7004 at $3.00 SL=1.50 Picked on Mar 28th at $59.94 P/E = 35 Change since picked +0.38 52-week high=$63.00 Analysts Ratings 16-8-7-0-0 52-week low =$41.50 Last earnings 01/00 est= 0.56 actual= 0.57 Next earnings 04-25 est= 0.42 versus= 0.61 Average Daily Volume = 11.00 mln /charts/charts.asp?symbol=T ************************************* BIG COVERED CALLS & NAKED PUT SECTION ************************************* The Sky Is Falling!... Based on the selling in many of the leading technology issues that might be a good description of today's activity. Once again the value of downside protection becomes evident and with the current lack of optimism in the market's outlook, our positions will be limited in number and very conservative. Remember, both of these strategies are neutral to bullish in nature and, as with any recommendation, each play should be evaluated for portfolio suitability and reviewed with regard to your specific investing approach and trading style. 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 AFCI APR 55 49.75 73.81 $5.25 7.3% PCLE APR 25 23.47 35.50 $1.54 6.7% Split 2 -1 ISSX APR 105 96.19 117.19 $8.82 6.3% ASYT APR 40 37.18 56.63 $2.82 6.2% YHOO APR 175 165.07 177.06 $9.94 6.1% DITC APR 90 83.38 115.00 $6.63 5.5% PHTN APR 70 66.50 72.75 $3.50 5.3% NXTV APR 125 117.71 137.94 $7.29 5.1% CY APR 45 42.93 45.00 $2.07 4.9% PHCM APR 120 114.51 169.44 $5.50 4.9% TGNT APR 80 75.25 75.50 $0.25 0.3% PUMA APR 67 62.88 57.75 ($5.12) 0.0% Split 2 -1 NEON APR 65 61.22 42.00 ($19.22) 0.0% *** Naked Puts: Stock Strike Strike Cost Current Profit Monthly Symbol Month Price Basis Price (Loss) Return ASYT APR 35 33.38 56.63 $1.63 11.5% AFCI APR 45 42.63 73.81 $2.38 10.1% NXTV APR 115 110.63 137.94 $4.38 9.9% YHOO APR 155 150.75 177.06 $4.25 9.9% ISSX APR 90 86.38 117.19 $3.63 9.0% MU APR 85 82.25 133.00 $2.75 8.9% CY APR 40 39.00 45.00 $1.00 8.7% TGNT APR 70 67.94 75.50 $2.06 8.4% INKT APR 140 136.00 182.00 $4.00 7.6% PCLE APR 22 22.03 35.50 $0.47 7.6% Split 2 -1 PHCM APR 105 102.56 169.44 $2.44 7.6% IBIS APR 85 83.25 106.13 $1.75 7.6% IMNX APR 51 49.83 60.63 $1.83 7.4% Split 3 - 1 NT APR 115 112.62 135.00 $2.38 6.5% SFE APR 60 58.00 71.63 $1.42 6.3% Split 3 - 1 AFCI APR 45 43.81 73.81 $1.19 5.9% PHTN APR 65 63.94 72.75 $1.06 5.7% PUMA APR 60 57.82 57.75 ($0.06) 0.0% Split 2 - 1 NEON APR 55 52.94 42.00 ($10.94) 0.0% *** *** Any reasonable loss-cut system should have closed you out of NEON in the $65-70 range. NEW PICKS 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. **** KSU - Kansas City Southern $91.31 *** Spin-Off Coming? *** Kansas City Southern operates in two business segments. Kansas City Southern Lines, the holding company for the transportation segment subsidiaries and affiliates, owns and operates a rail network of approximately 6,000 miles lines that link key markets in the United States and Mexico. Through strategic alliances and other agreements, KCSL's reach has been expanded to 25,000 miles of lines connecting Canada, the United States and Mexico. The Financial Services segment includes four subsidiaries. Janus serves as an investment advisor to the Janus Investment Funds and Janus Aspen Series, and to institutional and individual private accounts and other investment companies. Berger is also provides financial asset management services and products. Nelson offers investment planning and investment management services to individuals. DST provides information processing and computer software services and products to various service industries. Kansas City Southern is actually a financial-services company and Janus is its crown jewel. The Janus group has 21 retail mutual funds, 15 of them equity funds. Janus and its aggressive, growth oriented analysts have helped build the fund management assets to $325 billion. In January, Janus funds experienced $9 billion in net sales, accounting for the majority of KSU's earnings for the quarter. Even in light of that success, Kansas City Southern is planning to unload the company and get back to railroad operations. KSU plans to separate itself from Janus and two other subsidiaries, creating a new holding company called Stilwell Financial. Aside from the Janus group, Stilwell would also include the Berger Funds group and DST Systems (DST), which develops software products and services for other companies. Stilwell is expected to be traded on the New York Stock Exchange under the symbol SV. It will be interesting to see how the details of the upcoming spin-off affect KSU's share value. For now it appears that most investors are welcoming the idea. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 85 KSU PQ 189 3.38 81.62 13.3% Sell Put APR 80 KSU PP 102 2.00 78.00 9.7% Sell Put APR 75 KSU PO 1086 1.13 73.87 7.0% *** Chart = /charts/charts.asp?symbol=KSU **** MANU - Manugistics $59.25 *** On The Rebound! *** Manugistics Group provides solutions for customer-centric supply chain optimization that are comprised of software products and related services that enable clients to improve the efficiency at which products flow within and among companies from raw materials or parts through manufacturing to delivery of product to the end customer. Their solutions combined with their professional services enable their clients to create and optimize their supply chains around their customers, and are quick to implement, adapt easily to change and deliver rapid results. Their integrated suite of strategic, tactical and operational supply chain planning software products address demand planning, supply planning, manufacturing scheduling, and transportation management, and enables collaboration within and among enterprises. Among Manugistics clients are Coca-Cola Bottling, Compaq, DuPont, and General Electric. Manugistics posted a smaller-than-expected loss in its fourth quarter last week with licensing revenue of $22 million, up 45% from the year-ago quarter when it posted $15.2 million in sales. Based on the results of our fourth quarter, the company is ahead of the strategic plan that was established by the new CEO, Greg Owens. In fact, Manugistics appears to have made the transition to a growth company. Sales are up significantly from last quarter and costs are way down, and its brand name has regained some of its previous luster. Manugistics is also proud of its e-commerce initiatives in the business-to-business arena, boasting that 31% of the quarter's revenues came from eBusiness. The CEO said that number would eclipse 50% before the third quarter of next year, and that the company would reach profitability by the end of the year. Prudential leads a group of bullish analysts with a "buy" rating and together with the favorable technical outlook, this issue may be considered for any long-term portfolio. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call APR 45 ZUQ DI 1324 16.75 42.50 7.8% *** Sell Put APR 45 ZUQ PI 234 1.81 43.19 17.5% Sell Put APR 40 ZUQ PH 79 1.13 38.87 11.5% Sell Put APR 35 ZUQ PG 125 0.56 34.44 6.0% *** Chart = /charts/charts.asp?symbol=MANU **** MFNX - MetroMedia Fiber Network $94.75 *** Split Rally? *** Metromedia Fiber Network, the leading provider of end-to-end optical network and Internet infrastructure solutions, is revolutionizing the fiber optic industry. Offering virtually unlimited, unmetered bandwidth at a fixed cost, the company is eliminating the bandwidth barrier and redefining the way broadband capacity is sold. They are extending metropolitan optical networking infrastructure to the end user in strategic top-tier markets, enabling its customers to implement the latest data, video, Internet and multimedia applications. They focus on domestic intra-city fiber optic networks in clusters of the 15 largest cities throughout the United States. MetroMedia currently operates high-bandwidth fiber optic communications networks in New York and the greater Philadelphia area, and will begin to operate similar networks in Washington, D.C. They have also begun engineering and constructing networks in Chicago, San Francisco and Boston, Massachusetts. Earnings were great in the quarterly report with revenues rising 107% in 1999, up from $36.4 million in 1998. The company's total number of contracts increased 400% to $2.0 billion and their fiber network jumped 181% to 646,000 miles. To make things even better, their board has approved a two-for-one split of its common stock. The split, the fourth since the company went public in October of 1997, reflects the company's continued confidence in the success of its business strategy and it will be distributed on April 17 to shareholders of record as of March 14. We favor the recent technical trend and the bullish forecasts for growth. The current consolidation should offer some opportunities for additional premium selling in the deep-out-of-the-money Put positions. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 85 QFN PX 451 3.88 81.12 16.0% Sell Put APR 80 QFN PP 419 2.44 77.56 12.6% Sell Put APR 75 QFN PO 352 1.44 73.56 9.3% *** Chart = /charts/charts.asp?symbol=MFNX **** QCOM - Qualcomm $157.50 *** Own This One! *** Qualcomm is a global provider of digital wireless communications products, technologies and services based on its Code Division Multiple Access technology. QCOM designs, develops, manufactures and markets CDMA subscriber products and designs, develops and markets CDMA chipsets and system software. They also license and receive royalty payments on CDMA technology from major domestic and international telecommunications equipment suppliers. In addition, Qualcomm designs, manufactures and distributes products and provides services for its OmniTRACS system. The company also has contracts with Globalstar, a low-Earth-orbit satellite system utilizing CDMA technology, to design, develop and manufacture subscriber products and ground communications systems and to provide contract development services. Tuesday's news was the long-awaited settlement between Qualcomm and Motorola regarding a series of patent infringement lawsuits that began in March 1997. The agreement terminates the complex litigation comprising a number of separate federal court cases alleging claims and counterclaims for patent infringement, breach of the license agreements, misappropriation of trade secrets and unfair competition. In the settlement, each company agreed to dismiss its claims and counterclaims against the other and extend their CDMA cross-licenses. In addition, the companies said they have agreed to a three-year moratorium on lawsuits with respect to CDMA subscriber products, network equipment, chipsets and test equipment. They have also agreed to the terms of their original 1990 royalty-bearing license agreement. As part of the agreement, Motorola will again pay royalties to Qualcomm at rates that are consistent with newly licensed patents. The news of the Motorola settlement along with a number of recent agreements and licensing deals has brought QCOM back into favor with technology investors. Analysts are also bullish on the issue and today Lehman Brothers raised their price target on Qualcomm to $180. The favorable technical trend and the positive fundamental outlook (potentially higher royalties) are excellent reasons for the issue to continue higher. The cost basis in the recommended position is relatively conservative with a reasonable margin for downside consolidation. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Put APR 140 AUA PH 8944 3.50 136.50 9.4% Sell Put APR 137 AUA PW 1629 2.81 134.19 8.2% Sell Put APR 135 AUA PG 3591 2.31 132.69 7.1% Sell Put APR 132 AUA PV 1004 1.94 130.06 6.5% Sell Put APR 130 AUA PF 9713 1.63 128.37 5.8% *** Chart = /charts/charts.asp?symbol=QCOM **** SPYG - Spyglass $72.75 *** OPTV Buy-Out! *** Spyglass provides strategic Internet consulting, software and professional services that enable content providers, service operators and device manufacturers to capitalize on the potential of the Internet. Particularly active in the interactive television (ITV) and mobile data(MD) markets, Spyglass offers end-to-end solutions to many of the world's premier organizations. Spyglass delivers solutions that enable information appliance users to access device-specific applications and receive time critical information utilizing the Internet. Spyglass solutions have helped customers Internet-enable a variety of devices as well as deliver HTML-based applications to information appliances such as television set-top boxes, televisions, gaming devices, wireless phones, navigation devices, Internet screen phones, office equipment, medical devices and industrial controls. Merger speculation has been rampant and Spyglass surged more than 30% in trading on Monday after OpenTV Corp (OPTV) said it would buy the Internet consultant and software company in a stock swap worth $2.5 billion. Under the terms of the agreement, Spyglass shareholders will receive 0.7236 share of OpenTV for each share of Spyglass held. Based on OpenTV's current stock price, the deal values Spyglass at about $80 per share, a favorable premium for shareholders and well above our cost basis in this speculative position. Of course we expect OPTV to move lower, but the big question is, "Will OPTV break below technical support near $90, and if so, will SPYG be more attractive to another suitor at a higher price?" Only time will tell.. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call APR 55 YQG DK 401 20.38 52.37 6.6% *** Sell Put APR 55 YQG PK 395 2.63 52.37 20.2% Sell Put APR 50 YQG PJ 151 1.63 48.37 13.3% Sell Put APR 45 YQG PI 124 0.88 44.12 7.5% *** Chart = /charts/charts.asp?symbol=SPYG **** ZIXI - Zixit $89.50 *** New Trading Range! *** ZixIt provides products and services that enhance privacy, security and convenience over the Internet. ZixIt is the developer and owner of the ZixIt Digital Signature and encryption technology. They are also developing an Internet transaction authorization system. Zixit recently launched a secure Internet messaging system, ZixMail. ZixMail is a secure document delivery, private email, and message tracking service that enables Internet users worldwide to easily send and receive encrypted and digitally signed communications using their existing email systems and addresses. Clients that have recently contracted to use ZixMail include Conoco, the Perot Group, and numerous other firms. Zixit shares jumped above $90 last week after the company said a group headed by Florida financier Wayne Huizenga, the owner of the Miami Dolphins football team among many other assets, will invest between $20 million and $44 million in a private placement of the company's common stock. Now the issue is well above technical support and clearly in a new trading range. With momentum from institutional-sized volume and the recent bullish outlook, the issue should easily finish the expiration period above our cost basis. Action Month & Option Open Closing Cost Monthly Req'd Strike Symbol Interest Price Basis Return Sell Call APR 65 HQU DM 405 27.00 62.50 5.3% *** Sell Put APR 65 HQU PM 186 2.31 62.69 15.1% Sell Put APR 60 HQU PL 272 1.63 58.37 11.0% Sell Put APR 55 HQU PK 157 0.81 54.19 5.7% *** Chart = /charts/charts.asp?symbol=ZIXI ************************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. Move your trading into the next millennium with Preferred Capital Anything else is too slow! http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN ************************************************************** ******************* FREE TRIAL READERS ******************* If you like the results you have been receiving we would welcome you as a permanent subscriber. The monthly subscription price is 39.95. 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