Option Investor
Newsletter

Daily Newsletter, Wednesday, 05/21/2003

HAVING TROUBLE PRINTING?
Printer friendly version
The Option Investor Newsletter                Wednesday 05-21-2003
Copyright 2003, All rights reserved.                        1 of 2
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Inside Day
Futures Wrap: Flat close
Index Trader Wrap: See Note
Weekly Fund Family Profile: Glenmede Funds


Posted online for subscribers at http://www.OptionInvestor.com
*******************************************************************
MARKET WRAP  (view in courier font for table alignment)
*******************************************************************
      05-21-2003           High     Low     Volume Advance/Decline
DJIA     8516.43 + 25.07  8523.16  8431.21 1.79 bln   1971/1311
NASDAQ   1489.87 -  1.22  1490.82  1478.15 1.74 bln   1684/1473
S&P 100   465.20 +  1.62   465.58   461.07   Totals   3755/2784
S&P 500   923.42 +  3.69   923.85   914.91
RUS 2000  410.73 +  1.70   410.29   407.05
DJ TRANS 2356.39 -  8.89  2364.59  2344.02
VIX        23.21 -  0.16    24.59    22.87
VXN        30.88 -  1.34    32.85    30.81
TRIN       0.74
PUT/CALL   1.00
*******************************************************************

Inside Day
Jonathan Levinson

It was a narrow range session today compared with what we've seen
lately, with tension building as bulls and bears were forced ever
closer by tapering chart formations.  Today's candles printed
lower highs and higher lows than yesterday, setting up the
markets for a big move tomorrow.  The indices finished almost
where they started despite a number of ordinarily market moving
events.


Daily Chart of the INDU





Weekly Chart of the INDU




Note that despite the strong shows of bullish conviction
yesterday and today, nothing was done to reverse the sell signals
generated by Monday's selloff.  On the daily charts of both the
INDU (above) and the COMPX (below), we have bearish crossovers of
the 13 day simple moving average by the 5 day sma.  Zooming out
to the weekly charts, we see that the uptrend of the past months
has yet to be seriously reversed, but this week has so far
printed a bearish engulfing candle, which portends lower prices
to come.

Daily Chart of the COMPX




Weekly Chart of the COMPX





There were no market-moving economic reports today.  The Energy
Department reported that crude oil stocks rose 600,000-barrels
during the week ended May 16, vs. expectations for a 1M barrel
rise. Total inventories are now 285.1M barrels, which is 12.4%
below last year's equivalent level. Gasoline inventories fell by
200,000 barrels to 208.4M, bringing total supplies to levels 4.3%
lower than at this time last year.  July crude closed at $29.03 a
barrel, up 62 cents.

Fed Chairman Alan Greenspan addressed Congress today commencing
at 9:30 EST.  The US Dollar Index spiked to its low of the day in
very volatile trading just after he began speaking and recovered
weakly for the remainder of the session.


Chart of the US Dollar Index





As always, there was much to ponder in his prepared remarks and
moreso in his responses during the Q&A session that followed.
Most notably for short term traders, the fed chairman added a
dose of uncertainty for those who felt that a rate cut by the fed
at  the June 25 meeting was a foregone conclusion.  As Greenspan
put it, "We do not yet have sufficient information on economic
activity following the end of [Iraq] hostilities to make a firm
judgment about the current underlying strength of the real
economy. Incoming data on labor markets and production have been
disappointing. Payrolls fell further in April, and industrial
production declined as well. Because of the normal lags in
scheduling production and in making employment decisions, these
movements likely reflect business decisions that, for the most
part, were made prior to the start of the war, and many more
weeks of data will be needed to confidently discern the
underlying trends in these areas."  If anything, I would expect
this statement to redirect the market's attention to the upcoming
economic data scheduled between now and the end of June.  Given
the market's almost perfect disregard for the uniformly bleak
picture painted by the data of recent months, Greenspan's
comments will perhaps call the markets back to reality.

There were other interesting comments, and I strongly suggest a
read of his prepared comments at
http://www.federalreserve.gov/boarddocs/testimony/2003/20030521/default.htm.
  I'll emphasize only that the fed chairman once again
displayed an inability to pronounce the word "deflation" even
once, but highlighted that risk throughout his remarks and in his
subsequent responses to questions from the Joint Committee.  As
he put it, "Indeed, we have reached a point at which, in the
judgment of the Federal Open Market Committee, the probability of
an unwelcome substantial fall in inflation over the next few
quarters, though minor, exceeds that of a pickup in inflation."
The fact that the US Dollar Index actually found support today is
interesting, and likely proves that Mr. Greenspan's counterpart
in Japan was adding dollars to the BOJ's portfolio.  (As of this
writing, USD:JPY was up .48%, some of the only green on my forex
screen and the biggest loser against the USD in today's session.)
With Greenspan discussing the purchase of long bonds in the event
that the federal funds rate "goes to zero" and highlighting the
risk of a "substantial fall in inflation", while being too
frightened to even utter the word "deflation", no clearer signal
to sell dollars could be made.  The fed continues to make a
strong case for the ownership of precious metals.  Gold,
incidentally, was up 6.10 to 372.60 for the June contract as of
this writing.

During the course of his remarks, Chairman Greenspan mentioned
the boom in home equity borrowing.  The Mortgage Bankers
Association reported that 30-year loan rates hit 5.17%, below the
record set in the May 9 week of 5.27%.  These low rates sent the
refinance index up 15.2% to 8,351.1.  The MBA's market index of
overall demand was up 10.2% to 1,562.8 and the purchase index
slipped 4.7% to 395.8.

Weekly chart of the thirty year yield





While this is not an original thought, as the above figures from
the Mortgage Bankers Association shows, it remains an excellent
time to refinance your home mortgage- the best in decades.

Corporate news was slim today.  NSM announced before the bell
that it's pursuing its 'profit-improvement' initiative launched
in February. The company said it's still actively pursuing a sale
of its Information Appliance unit, and it is closing its cellular
base-band business unit, which will result in a workforce
reduction of 340 jobs. NSM said that it would record a charge of
between $25 million and $30 million in Q4 from these moves.  The
company continues to expect sequential growth of 4% to 7%.

Big Mo's parent, Altria (NYSE:MO) was up strongly today after
Florida's Court of Appeal overturned a jury award of $145B in
punitive damages rendered in the court of first instance.  This
had been the largest such award in US history, and in rendering
its decision, the Court criticized the plaintiffs' counsel,
stating "it is obvious that the 'runaway' jury award was largely
the result of numerous improper comments by plaintiffs' counsel
directing the jury to disregard limitations on punitive damages.
The trial was book-ended with prejudicial misconduct which
incited the jury to disregard the law because the defendants are
tobacco companies."  The court overturned the Engel decision and
held that in prosecuting tobacco claims, individual plaintiffs
may exercise their rights individually, but not in a class
action.  The decision buoyed shares of tobacco companies, and MO
was lifted 10% on the news.

A bill was been introduced to extend the SEC's powers in the
prosecution of securities fraud cases.  The bill would widen SEC
powers to the detriment of state jurisdiction in moving against
protected assets of alleged violators. In addition to extending
the SEC's authority to impose civil penalties and fines, the
legislation would require redirect moneys recovered by states in
securities violation cases to the SEC for redistribution to
investors.

Salomon Smith Barney, the brokerage arm of Citigroup, lost a
$600,000 arbitration for putting unsuitable investments in a
customer's IRA. The arbitration board ruled that SSB failed to
diversify her investments, did not properly evaluate asset
allocations and failed to exercise risk management to protect the
account. This is one of the first cases to go to arbitration, and
if it starts a trend, as we opined it would last year when this
issue first came to the fore, brokers will have some additional
liabilities to add to their balance sheets.

INTC's shareholders voted against a proposal to expense stock
options, narrowly defeating the resolution.  According to the
company, treating stock options as a standard business expense
would have cut its first-quarter net by one-third.

Japan's farm ministry announced that it had suspended imports of
cattle, beef and beef-related products from Canada following the
announcement on Tuesday that the first Canadian cow in 10 years
had tested positive for Mad Cow disease. Canadian beef imports
accounted for about 3% of total beef imports in Japan in 2002.
This news scared US invertors, as the disease had previously been
confined to Europe and Japan.  The US beef industry is worth an
estimated $60 billion, and relies on similar protections and
procedures as those employed in Canada.  The consensus appeared
to be that this was an isolated case, as MCD and WEN shares
stabilized today after yesterday's selloff.  After the close, it
was announced that some beef from the quarantined herd had made
it into the food chain, contrary to what had been believed
yesterday.

Al-Jazeera aired what was purportedly a new Bin Laden tape which
urged Muslim's to "take a lesson" from the 9/11 attacks and
"light a fire under the feet" of the United States, Britain,
Australia and Norway by attacking embassies and corporations.  At
11AM, it was announced that an Israeli official made an
unannounced visit to White House.  The Defense Intelligence
Agency (DIA) raised the military terror threat level from
"significant" to "high," its top level, and it was widely
reported that the nation is anticipating a possible terrorist
attack.

Despite fresh testimony from Greeenspan, terrorist news and
heightened nervousness ahead of the long weekend, the markets
coiled tighter to give us an "inside" day.  Inside days tend to
precede breakout moves as the markets uncoil from their
compressed ranges.  With terrorist fears and the markets still
near their multiweek highs, there's a good chance that traders
will try to lighten up their positions tomorrow.  If they do,
then we could see selling to challenge today's lows.  As well, in
light of Greenspan's comments today, the initial claims report
due tomorrow before the bell (briefing forecase 435,000, expected
420,000, prior reading 417,000) could have a larger impact than
usual as investors squint to find clues as to whether the fed will
seek to cut rates or not in June.  See you at the bell!


************
FUTURES WRAP
************

Flat close
Jonathan Levinson

Daily Pivots (generated with a pivot algorithm and unverified):

Figures rounded to the nearest point:

           R2     R1    Pivot   S1     S2
DJIA      8582   8549   8490   8457   8398
COMPX     1498   1494   1486   1482   1474
ES03M      931    927    920    916    909
YM03M     8572   8533   8479   8440   8386
NQ03M     1130   1122   1113   1105   1097

The markets had many excuses to make a big move today but held
within their previous candles, printing an inside day.  Volume
was light on the COMPX at 1.58B shares traded, while the NYSE
kept up the week's pace at 1.79B shares.  Volatility declined,
with the VIX losing .16 to close at 23.21, QQV -.79 to 26.82, and
the VXN –1.34 to 30.88.

The declining volatility indices combined with the resilience at
the day lows and closes near the day highs left traders with the
feeling that the session was more bullish than it actually was.
However, the day finished essentially flat, with the COMPX –1.22
and the INDU up 25.  Indeed, the indices have all declined
dramatically this week, yet the volatility indices have barely
risen, a phenomenon I remember noting last spring just before the
large decline.  Whether it will play out the same way will have
to be seen.

The US Dollar Index became choppy and, while the fed chairman
spoke, tested the bear market low at 93 for a third time.

15 minute chart of DX00Y





QQQ:QQV chart




The QQQ:QQV ratio was essentially unchanged today, and, like the
futures and equity indices, did nothing but extend yesterday's
move.  It remains on sell signals, and today's print failed to
penetrate either the 5 or 13 day simple moving averages.  For
now, the trend of the QQQ volatility or "fear" index rising
relative to the QQQ remains intact, despite today's sideways
action.


Daily QQQ chart




More indecision today, as the second doji candle in a row is
printed below Monday's bearish engulfing.  By skating sideways,
the QQQ fell below the secondary ascending trendline.  A failure
to break back above it will print an ugly picture heading into
Friday.


On to the futures:

Because of the narrow range day, I've focused on the smaller,
rather than larger picture.  If you wish to zoom out, I'd suggest
taking a look at the daily candle charts profiled in last night's
Futures Wrap.


20 day chart of the NQ3M




The resistance line from yesterday never got challenged, and
while the actual placement of the line is open to interpretation,
it will take a break of the 1120 level to give bulls any hope
from current levels.  Note that the MacD and stochastics have
been in up-phases here, and the price has barely budged.  This
lack of traction, along with the declining ADX during this
oscillator up-phase, looks quite bearish to me.


5 minute 2 day chart of the NQ3M




There's a lot going on in this "scalper's" 2 day chart.  It
appears to be bad data that caused the downward spike after the
close.  Note the 1117 Fibonacci resistance level that coincides
roughly with the horizontal resistance that held back today's
advances and supported yesterday's declines.  Based on the
foregoing, I'll be watching 1117-1120 on the NQ contract as a
short term pivot.

20 day 30 minute chart of the ES3M




The ES closed above the 920 resistance level discussed last
night.  In doing so, it has driven the stochastics nearly into
overbought territory, while the lagging MacD is still climbing.
The ADX leveled off, and appears indecisive to me at current
levels.  Tomorrow will be an important day.  Because of the small
candles, I have not drawn secondary horizontal resistance at 925,
but it's clear on the above chart as well as below:

5 minute 2 day chart of the ES3M




Zooming in to the 2 day, 5 minute candle chart, we see resistance
at the 925 level, while there's descending trendline resistance
below 924.  There will certainly be a break either to the upside
or downside tomorrow.

20 day 30 minute chart of the YM




The 925 ES level corresponds to the 8500 resistance level on the
YM contract.  We see the stochastic beginning to "round out" just
below overbought territory.  The ADX has begun to show a
strengthening trend on the advancing price, but it's still weak,
below the .3 level.  The 8500 level will be a critical pivot
tomorrow.

5 minute 2 day chart of the YM3M




There's little to add on the short term YM chart.  The range has
grown so narrow that a gap in either direction would resolve the
pennants being printed on the above charts.  Note, however, that
there's a serious divergence between the NQ futures and the YM/ES
contracts.  NQ sunk lower off the open and rose less than the YM
or ES, printing more of a rectangle or flag than the pointier
pennants on the YM and ES.  For the past months, NQ has led the
other indices.  Is this portending  weakness from the S&P and
Dow?  Or, did the upside break from its wedge this afternoon
signal strength to follow?  The 1117-1120 NQ level will be the
key here, and that's what we'll be watching tomorrow morning in
the Market Monitor.


********************
INDEX TRADER SUMMARY
********************

Check the Site Later Tonight For Jeff's Index Trader Article
http://members.OptionInvestor.com/itrader/marketwrap/iw_052103_1.asp


************************Advertisement*************************
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.
Anything else is too slow!

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


**************************
WEEKLY FUND FAMILY PROFILE
**************************

Glenmede Funds

This week's Fund Family Profile looks at the Glenmede Funds run
by Glenmede Trust Company, an independently owned advisory firm
headquartered in Philadelphia (PA) providing specialized wealth
management solutions to high net worth individuals, endowments,
foundations, pensions and other institutions.  Four children of
Joseph N. Pew (founder, Sun Oil Company) started Glenmede Trust
Company in 1958.  Today, the closely held firm manages over $15
billion in assets for more than 1,500 U.S. client relationships,
per company sources.

According to the Glenmede website, (www.glenmede.com), the firm
established its first mutual funds in 1988 with the creation of
four fund portfolios, including the Glenmede International Fund
(GTCIX) and the Glenmede Core Fixed Income Fund (GTCGX).  Today,
personal investors have various equity portfolios, fixed income
portfolios and money market portfolios to pick from.  Fund fact
sheets for each portfolio are available on the Glenmede website.

As a full-service company, Glenmede strives to provide superior
investment products and services.  President and CEO, Albert E.
Piscopo, along with executive vice president and head of client
services, J. Thomas Dunlevy, are at the top of the organization
chart.  Sally Wirts, a first vice president with Glenmede Trust,
is managing director of the firm's fixed income department.

Andrew B. Williams is a senior VP and manager of equity research
and international equity portfolios with Glenmede Trust.  He is
also general partner of Philadelphia International Partners, the
entity that along with Glenmede owns Philadelphia International
Advisors LP, the sub-investment advisor to Glenmede International
Fund since 1988.  At 14+ years, Williams is the senior member of
Glenmede Trust Company's portfolio management staff.

Laura LaRosa and Robert Mancuso are vice presidents at Glenmede
Trust.  Ms. LaRosa has managed two municipal bond portfolios for
Glenmede for the past 8 years.  Mr. Mancuso has managed Glenmede
Small Cap Equity Fund since February 1996.  Bruce D. Simon, chief
investment officer of the firm's high net worth unit, has managed
(or co-managed) the Glenmede Strategic Equity Fund since January
1, 1998.  Having a stable portfolio management group is a benefit
for shareholders.

Glenmede's mutual funds have no front-end or back-end loads and
require a minimum initial investment of $0 or $25,000 depending
on which fund you are talking about.  Below is a summary of the
purchase requirements for Glenmede's stock and bond funds using
data from Morningstar.com.

 Minimum Initial Purchase Requirements:
 Glenmede Core Fixed Income (GTCGX) $25,000 ($0 IRAs/AIPs)
 Glenmede International (GTCIX) $0 (All Account Types)
 Glenmede Large Cap Value (GTMEX) $0 (All Account Types)
 Glenmede Municipal Intermediate (GTCMX) $25,000 ($0 IRAs/AIPs)
 Glenmede New Jersey Municipal (GTNJX) $25,000 ($0 IRAs/AIPs)
 Glenmede Small Cap Value (GTCSX) $0 (All Account Types)
 Glenmede Small Cap Growth (GTGSX) $25,000 ($0 IRAs/AIPs)
 Glenmede Strategic Equity (GTCEX) $0 (All Account Types)

So, if you establish an IRA account or AIP (automatic investment
program) the investment minimum is $0.  Four Glenmede funds have
a minimum initial purchase of $25,000 for regular accounts.  Per
Morningstar.com, all but one of the Glenmede mutual funds has an
annual expense ratio above 1.00%.  Six funds have expense ratios
of 0.27% or less.  To download a fund prospectus discussing risk
factors and costs/expenses in greater detail, go to the Glenmede
website at www.glenmede.com.  Read the fund prospectus carefully
before investing.

Fund Overview

The Glenmede Funds is a family of 10 no-load mutual funds across
the three major asset classes: stocks, bond and cash.  There are
five equity funds, three fixed income funds and two money market
portfolios to choose from, as follows:

 Glenmede Equity Portfolios:
 Glenmede International (GTCIX)
 Glenmede Large Cap Value (GTMEX)
 Glenmede Small Cap Value (GTCSX)
 Glenmede Small Cap Growth (GTGSX)
 Glenmede Strategic Equity (GTCEX)

 Glenmede Fixed Income/Money Market Portfolios:
 Glenmede Core Fixed Income (GTCGX)
 Glenmede Municipal Intermediate (GTCMX)
 Glenmede New Jersey Municipal (GTNJX)

 Glenmede Money Market Portfolios:
 Glenmede Government Cash (GTGXX)
 Glenmede Tax-Exempt (GTCXX)

The Glenmede Government Cash Portfolio currently offers a 7-day
(simple) yield of 1.19%, one of the best yields available today
among taxable money market funds.  Glenmede Tax-Exempt Portfolio
has a current 7-day yield of 1.06% for one of the best yields in
the tax-exempt money market fund class.  Like the Vanguard Group,
these money market funds enjoy a significant cost advantage over
other taxable and tax-exempt money market funds available, which
translates into more competitive yields.

The firm's largest equity portfolio, the $916.8 million Glenmede
International Portfolio (GTCIX), pursues maximum long-term total
return consistent with reasonable risk to principal by investing
primarily in equity securities of mid-to-large foreign companies.
The approach to international investing that fund manager Andrew
Williams takes is described as long-term and risk-adverse.  This
fund seeks to enhance value over the long run by investing in an
unhedged portfolio of foreign companies with traditional "value"
characteristics and positive company-specific catalysts, focused
in countries that also exhibit strong "value" characteristics at
time of purchase.

The $259 million Glenmede Small Cap Value Portfolio (GTCSX) also
seeks to provide capital appreciation for investors, but invests
primarily in equity securities of small-size U.S. companies with
strong value characteristics.  At least 65% of total assets must
be in invested in stocks with market caps below the maximum cap
permitted for an equity security in the Russell 2000 (small-cap)
index.  Both Morningstar and Lipper indicate that the fund has a
core style of management, reflecting a blend of value and growth
characteristics.  Its sibling, Glenmede Small Cap Growth (GTGSX),
maintains a small-cap growth bias overall.  Both small-cap funds
have an average market capitalization of near $1.1 billion today,
per Morningstar.

The two other Glenmede equity portfolios emphasize the stocks of
larger U.S. companies.  Glenmede Large Cap Value (GTMEX) invests
in large-cap stocks with solid value characteristics and company
specific catalysts.  Glenmede Strategic Equity (GTCEX) primarily
invests in stocks of large-cap companies with favorable "growth"
characteristics that are trading at reasonable prices at time of
purchase.

Income-oriented investors have three Glenmede fixed income funds
to pick from.  The $193 million Glenmede Core Fixed Income Fund
(GTCGX) seeks long-term total return, consistent with reasonable
risk to principal, by investing primarily in "intermediate-term"
U.S. government securities.  These securities include mortgage-
backed securities and fixed income securities issued by the U.S.
Treasury, U.S. Government agencies or other Government-sponsored
instrumentalities.  Two municipal bond portfolios round out the
Glenmede fixed income fund lineup.

Fund Performance

Of the eight Glenmede stock and bond funds in Morningstar's star
rating system, four are rated 4 stars (above average) based upon
their risk-adjusted performance versus category peers, including
the firm's three largest fund portfolios: Glenmede International
(GTCIX), Glenmede Small Cap Value (GTCSX) and Glenmede Core Fixed
Income (GTCGX).

Glenmede International Fund's 4-star overall rating reflects its
production of above-average total return with below-average risk
relative to the average foreign stock fund.  For the trailing 10
year period through April 30, 2003, the fund produced an average
annual total return of +5.8%, 3.8% better a year on average than
the MSCI EAFE index benchmark and good enough to rank in the top
quintile of the Morningstar foreign stock category.  Although it
lost an average of 7.7% a year over the past three years, losses
were significantly lower than the MSCI EAFE benchmark and strong
enough from a capital preservation viewpoint to rank in the 17th
percentile of the foreign stock category.

Another 4-star rated Glenmede stock portfolio that has displayed
below average volatility relative to category peers is the Small
Cap Value Portfolio (GTCSX).  It also sports a respectable long-
term track record.  For the trailing 10-year period (thru April
30), the fund produced an average annual total return of 10.30%,
ranking in the 38th percentile of the small-blend category, per
Morningstar.   Its 10.3% annualized return outpaced the Russell
2000 index benchmark by an average of 2.8% a year over the that
period.

Glenmede Core Fixed Income Fund (GTCGX) derives its 4-star rating
from having produced above average returns with average risk when
compared to other intermediate-term bond funds.   Over the last 5
years it has produced an annualized total return of 7.6%, ranking
in the category's top 14% while its 6.8% annual-equivalent return
over the past 10 years ranks in the top 25% of the category using
Morningstar's numbers.  The Core Fixed Income Portfolio this year
has sputtered a little bit, increasing only 3.4% and ranking last
quartile.

The Glenmede New Jersey Municipal Portfolio (GTNJX) is the firm's
other Morningstar 4-star rated fund.

Conclusion

Philadelphia-based Glenmede Trust Company and the Glenmede Funds
have a lot going for them.  This wealth management advisory firm
has been managing money for institutions and wealthy individuals
since 1958, and has been managing the Glenmede Funds since 1988.
Experienced management and low operating expenses add greatly to
the overall appeal of the Glenmede Funds.  The low expenses help
to maintain competitive fund performance.

Yesterday, we looked at four funds that Morningstar said you may
want to consider owning when the dollar falls, as it's doing now
in 2003 relative to major foreign currencies (EURO included).

The Morningstar article omitted one fund that you may also wish
to consider, Glenmede International Portfolio.  It believes the
best way to enhance value over time is to invest in an unhedged
portfolio of undervalued foreign stocks.  Unhedged funds can be
more volatile than hedged portfolios, but Andrew Williams in 14
years at the reins, has done a nice job of protecting principal
in market downswings.

Steve Wagner
Editor, Mutual Investor
steve@mutualinvestor.com


************************Advertisement*************************
If you trade options online, then you need an online broker that:
offers true direct access to each option exchange
offers stop and stop loss online option orders
offers contingent option orders based on the price of the option or
stock
offers online spread order entry for net debit or credit
offers fast option executions

PreferredTrade offers these online option trading features and more;
call 1-888-889-9178 or click for more information.

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 $49.95. The quarterly
price is $129.95 which is $20 off the monthly rate.

We would like to have you as a subscriber. You may
subscribe at any time but your subscription will not
start until your free trial is over.

To subscribe you may go to our website at

www.OptionInvestor.com

and click on "subscribe" to use our secure credit
card server or you may simply send an email to

 "Contact Support"

with your credit card information,(number, exp date, name)
or you may call us at 303-797-0200 and give us the
information over the phone.

You may also fax the information to: 303-797-1333


**********
DISCLAIMER
**********

Please read our disclaimer at:
http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html


**************************************************************
ADVERTISING INFORMATION

For more information on advertising in OptionInvestor Newsletter,
or any Premier Investor Network newsletter please contact:

Contact Support
The Option Investor Newsletter                Wednesday 05-21-2003
Copyright 2003, All rights reserved.                        2 of 2
Redistribution in any form strictly prohibited.


In Section Two:

Stop Loss Updates: None
Dropped Calls: None
Dropped Puts: None
Play of the Day: NEW Call - DISH
Spreads, Combinations & Premium-Selling Plays: Bulls Battle Back!
Market Posture: Mostly Bullish

Updated on the site tonight:
Market Posture: Still Not Ready


************************Advertisement*************************
Tired of waiting on trades to execute?
Does your broker offer Stop Losses on Options?

Trade instantly with Stop Losses at PreferredTrade Inc.
Stop Losses based on the option price or the stock price.
Move your trading into the next millennium with PreferredTrade.
Anything else is too slow!

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


*****************
STOP-LOSS UPDATES
*****************

None


*************
DROPPED CALLS
*************

None


************
DROPPED PUTS
************

None


************************Advertisement*************************
If you trade options online, then you need an online broker that:
offers true direct access to each option exchange
offers stop and stop loss online option orders
offers contingent option orders based on the price of the option or
stock
offers online spread order entry for net debit or credit
offers fast option executions

PreferredTrade offers these online option trading features and more;
call 1-888-889-9178 or click for more information.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


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

**THIS PLAY OF THE DAY IS ALSO A NEW CALL ON OptionInvestor.com**

EchoStar Communications - DISH - cls: 31.10 chg: +0.65 stop: 29.99

Company Description:
EchoStar Communications Corporation, through its DISH
Network(TM), is a leading U.S. provider of satellite television
entertainment services with 8.53 million customers. DISH Network
provides advanced digital satellite television services to the
home, including hundreds of video, audio and data channels,
personal video recording, HDTV, sports and international
programming, professional installation and 24-hour customer
service. (source: company press release)

Why We Like It:
The story never changes.  What drives prices is corporate
earnings and DISH, for once, has swung back into the profitable
column.  Shares burst over the $30.00 resistance level in early
May ahead of their May 6th earnings announcement.  The company
beat the street by 2 cents with 12 cents a share.  This was a
drastic improvement over a year ago, which was a loss of 20 cents
a share.  DISH added 350,000 new subscribers and by March 31st
had 8.53 million subscribers on its satellite TV system.  The
company said revenues jumped 24% to $1.36 billion.  EBITDA
numbers rose 57% to $276.9 million.  The stock has been
witnessing profit taking ever since the announcement but only
slowly and during a weak to sideways market.  The pull back and
bounce at the $30.00 level looks like a decent entry point that
will allow us to keep our risks at a minimum.

Suggested Options:
We're going to list June, July and September call options but our
favorites would probably be the July's as DISH's rising trend can
be slow at times, unfortunately, open interest appears to be
rather small on July's right now.

BUY CALL JUN 30.00 UAB-FF OI=5528 at $2.05 SL=1.00
BUY CALL JUN 32.50 UAB-FZ OI=2606 at $0.80 SL=0.00
BUY CALL JUL 30.00 UAB-GF OI=  20 at $2.75 SL=1.35
BUY CALL JUL 35.00 UAB-GG OI=  25 at $0.60 SL=0.00
BUY CALL SEP 35.00 UAB-IG OI=1328 at $1.40 SL=0.70

Annotated Chart of OHP:





Picked on May 21st at $31.10
Change since picked:   +0.00
Earnings Date       05/06/03 (confirmed)
Average Daily Volume = 3.3 million


************************Advertisement*************************
"If you haven't traded options online – you haven't really traded
options," claims author Larry Spears in his new compact guide book:

"7 Steps to Success – Trading Options Online".

Order today and save 25% (only $15) by clicking on PreferredTrade
and clicking on the link to the book on its home page.

http://www.PreferredTrade.com/CF/Home.CFM?ID=OIN
**************************************************************


*********************************************
SPREADS, COMBINATIONS & PREMIUM-SELLING PLAYS
*********************************************

Bulls Battle Back!
By Ray Cummins

Stocks ended higher today with tobacco shares leading the rebound
in industrial issues while technology shares limited the gains in
the broader market.

Blue-chip investors were pleased with the quarterly results from
Hewlett-Packard (NYSE:HPQ) and the optimism helped the Dow finish
25 points higher at 8,516.  The NASDAQ recovered from a 10-point
deficit to close only slightly lower at 1,489.  The S&P 500 index
added 3 points to end at 923 on strength in aluminum, tobacco, oil
and gas services, retail apparel, and shares.  Advancers outpaced
decliners 3 to 2 on the New York Stock Exchange, but the ratio was
almost even on the NASDAQ.  Trading volume was average with 1.45
billion shares exchanged on the Big Board and 1.56 billion shares
swapped on the technology exchange.  In the treasury market, the
10-year note was down 11/32 for a yield of 3.40%.

***************

SUMMARY OF CURRENT POSITIONS - AS OF 5/20/03

***************

The following summary is a reasonable account of the positions
previously offered in this section.  However, no representation
is being made as to the actual performance of a position and in
fact, there are frequently large differences between the summary
results and those of our subscribers, due to the variety of ways
in which each play can be opened, closed, and/or adjusted.  In
addition, the summary might not be completely representative of
the manner in which the average trader would react to changing
conditions in a position and to the options market in general.
The editor of this section does not take actual positions in any
published plays and the summary comments are simply a service to
help new traders understand when positions might be opened and
closed.  In most cases, actions taken based on the commentary
would be far too late to be effective, thus it is not intended
as a substitute for personal trade management nor does it in
any way replace your duty to diligently monitor and manage the
positions in your portfolio.


MONTHLY YIELD FOR UNCOVERED OPTIONS: MAXIMUM & SIMPLE

The Maximum Yield (listed in the summary and with "naked" option
selling plays) is the greatest possible profit available in the
position.  This amount, expressed as a percentage, is based on
the initial margin requirement as determined by the Board of
Governors of the Federal Reserve, the U.S. options markets and
other self-regulatory organizations.  Although increased margin
requirements may be imposed either generally or in individual
cases by various brokerage firms, our calculations use the widely
accepted margin formulas from the Chicago Board Options Exchange.
The "Simple Yield" is based on the cost of the underlying issue
(in the event of assignment), including the premium from the sold
option, thus it reflects the maximum potential loss in the trade.


Naked Puts
**********

Stock  Strike Strike  Cost Current   Gain    Max   Simple
Symbol  Month  Price Basis  Price   (Loss)  Yield  Yield

APPX     JUN    17   16.85  30.95   $0.65   8.35%  3.86%
AVID     JUN    22   22.10  27.63   $0.40   4.47%  1.81%
BBY      JUN    32   31.60  34.56   $0.90   5.14%  2.85%
COF      JUN    37   37.80  42.83   $0.70   4.58%  1.85%
IMCLE    JUN    15   14.65  17.66   $0.35   5.04%  2.39%
MRVL     JUN    20   19.50  26.91   $0.50   6.28%  2.56%
SFNT     JUN    20   19.65  25.10   $0.35   4.36%  1.78%
OVTI     JUN    20   19.45  28.57   $0.55   6.28%  2.83%


Naked Calls
***********

Stock  Strike Strike Cost  Current   Gain    Max   Simple
Symbol Month  Price  Basis  Price   (Loss)  Yield  Yield

DPMI     JUN    23   22.85  16.68   $0.35   5.35%  1.53%
PPDI     JUN    30   30.60  26.96   $0.60   4.82%  1.96%


Put-Credit Spreads
******************

Symbol  Pick   Last   Month L/P S/P Credit  C/B    G/L  Status

BJS     38.63  39.09   JUN   32  35  0.25  34.75  $0.25  Open
LEH     65.32  66.04   JUN   55  60  0.55  59.45  $0.55  Open


Call-Credit Spreads
*******************

Symbol  Pick   Last   Month L/C S/C Credit  C/B    G/L   Status

APC     44.40  47.16   JUN  50  47   0.35  47.85  $0.35   Open?
DVN     46.50  48.40   JUN  55  50   0.55  50.55  $0.55   Open?
FRX     51.18  47.85   JUN  60  55   0.50  55.50  $0.50   Open
KKD     31.45  30.80   JUN  40  35   0.65  35.65  $0.65   Open

Anadarko Petroleum (NYSE:APC) and Devon Energy (NYSE:DVN) are
on the "early exit" watch-list as oil service shares continue
to rally.  Conservative traders should consider closing these
spreads on any further upside movement.


Synthetic Positions
*******************

Symbol  Pick   Last   Month    L/C   S/P   Credit   M/V    Status

GYI     32.43  36.35   JUL     35    30    (0.10)   2.30    Open?

Getty Images (NYSE:GYI) has performed beyond all expectations,
achieving sizable profits well in advance of the July options
expiration.


Debit Straddles
***************

Symbol  Pick   Last   Month    L/C   L/P    Debit   M/V    Status

SNE     24.74  24.85   JUN     25    25     2.90    2.70    Open?

The "Reader's Request" straddle in Sony is starting to lose value
exponentially and conservative traders should consider closing
the position to limit losses.


Questions & comments on spreads/combos to Contact Support
**************

NEW POSITIONS

This following group of plays is simply a list of candidates to
supplement your search for profitable trading positions.  As with
any new investment, you must decide if the selections meet your
criteria for potential plays.  Only you can know what strategies
are suitable for your personal skill level, risk-reward tolerance
and portfolio outlook.  In addition, we recommend that you avoid
any trading techniques in which you are not completely comfortable
with the potential capital loss, the necessary adjustments, and
the common entry-exit strategies.  The positions with "*" will be
included in the weekly summary.  Those with "TS" (Target-Shoot)
are below our minimum monthly return, but may offer a favorable
entry price with a limit order, due to the daily volatility of
the underlying issue.

**************

BULLISH PLAYS - NAKED PUTS

All of these issues have robust option premiums and relatively
favorable technical indications.  However, current news and market
sentiment will have an effect on these stocks, so review each play
thoroughly and make your own decision about its future outcome.

WARNING: THE RISK IN SELLING UNCOVERED OPTIONS IS SUBSTANTIAL!

The sale of uncovered puts entails considerable financial risk,
far more than the initial margin or collateral required to open
a position.  The maximum financial obligation for the sale of a
naked put is the strike price (of the underlying stock) that is
sold.  Although this obligation is reduced by the premium from
the sale of the option, a writer of puts should have the cash or
collateral equivalent of the sold strike price in reserve at all
times.  In addition, there is one very important rule when using
this strategy: Don't sell puts on stocks that you don't want to
own!  Why?  Because stocks occasionally experience catastrophic
declines, exponentially increasing the margin maintenance and
possibly causing a devastating shortfall in your portfolio.  It
is also important that you consider using trading stops on naked
option positions to help limit losses when a stock's price falls.
Many professional traders suggest closing the position when the
underlying share value moves below the sold strike, or using a
"buy-to-close" stop order at a price that is no more than twice
the original premium received from the sold option.

**************
ANPI - Angiotech  $28.91  *** Stent-Coating Maker ***

Angiotech Pharmaceuticals (NASDAQ:ANPI) is engaged in the fusion
of medical device technologies and pharmaceutical therapies.  The
company's first product was a drug-coated stent.  Angiotech's goal
is to develop other products to enhance the performance of medical
devices and biomaterials through the use of pharmatherapeutics.
In September 2002, the company and Cohesion Technologies, agreed
to a merger in which Cohesion will merge with a subsidiary of
Angiotech, with Cohesion continuing as a wholly owned subsidiary
of the company.

ANPI - Angiotech  $28.91

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 22.5  AUJ RX     872    0.25  22.25   4.2%   1.1% TS
SELL PUT  JUN 25    AUJ RE     414    0.85  24.15  10.1%   3.5%


**************
APPX - American Pharmaceutical  $30.78  *** Rally Mode! ***

American Pharmaceutical Partners (NASDAQ:APPX) is a specialty
pharmaceutical company that develops, manufactures and markets
injectable pharmaceutical products.  The firm produces over 100
generic injectable pharmaceutical products in more than 300
dosages and formulations. Its primary focus is in the oncology,
anti-infective and critical care markets.  The company makes
products in all of the three basic forms in which injectable
drugs are sold: liquid, powder and lyophilized (freeze-dried).

APPX - American Pharmaceutical  $30.78

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 25    AQO RE    1,370   0.45  24.55   6.5%   1.8% *
SELL PUT  JUN 30    AQO RF    1,030   1.85  28.15  14.0%   6.6%


**************
JCOM - j2 Global Communications  $32.60  *** Next Leg Up? ***

j2 Global Communications (NASDAQ:JCOM) provides outsourced value
added messaging and communications services to individuals and
businesses throughout the world.  The company offers faxing and
voicemail solutions, Web initiated conference calling, document
management solutions and unified messaging services.  j2 Global
markets its services principally under the brand names eFax and
jConnect.  The company delivers its services through its global
telephony/Internet protocol network, which spans more than 600
cities in 18 countries across five continents, including four
capital cities in Latin America where j2 Global is in the process
of launching its unique service.

JCOM - j2 Global Communications  $32.60

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 25    JQF RE    1,585   0.45  24.55   6.5%   1.8% *
SELL PUT  JUN 30    JQF RF      880   1.45  28.55  12.4%   5.1%


**************
MO - Altria Group  $38.30  *** An Entry Point? ***

Altria Group (NYSE:MO), formerly Philip Morris Companies, is a
holding company and the parent company of Philip Companies.  The
company's wholly owned subsidiaries, Philip Morris USA (PM USA),
Philip Morris International (PMI) and its majority-owned (84.2%)
subsidiary, Kraft Foods (Kraft), are engaged in the manufacture
and sale of various consumer products, including cigarettes,
foods and beverages.  Philip Morris Capital Corporation (PMCC),
another wholly owned subsidiary, is primarily engaged in leasing
activities.  The company's former wholly owned subsidiary, Miller
Brewing Company (Miller), was engaged in the manufacture and sale
of various beer products prior to the merger of Miller into South
African Breweries plc (SAB) in 2002.

MO - Altria Group  $38.30

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 35    MO RG    30,679   0.45  34.55   3.7%   1.3% TS
SELL PUT  JUN 37.5  MO RU     8,682   1.25  36.25   8.0%   3.4%


**************
MRVL - Marvell Technology  $26.95  *** Testing Recent Highs! ***

Marvell (NASDAQ:MRVL) designs, develops and markets integrated
circuits utilizing proprietary communications mixed-signal and
digital signal processing technology for communications-related
markets.  Marvell offers its customers a wide range of integrated
circuit solutions using proprietary communications mixed-signal
processing and digital signal processing technologies.  Marvell's
product groups include: storage products, consisting of a variety
of read channel, system-on-chip and preamplifier products; and
broadband communications products, consisting of a variety of
transceiver products, switching products, internetworking
products and wireless LAN products.

MRVL - Marvell Technology  $26.95

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 22.5  UVM RX    1,452   0.40  22.10   6.0%   1.8% *
SELL PUT  JUN 25    UVM RE    2,684   0.95  24.05   9.8%   4.0%


**************
OVTI - OmniVision  $28.96  *** Consolidation Complete? ***

OmniVision Technologies (NASDAQ:OVTI) designs, develops and sells
high performance, high quality and cost efficient semiconductor
imaging devices for computing, telecommunications, industrial,
automotive and consumer electronics applications.  The company's
main product, an image sensing device called a CameraChip, is used
to capture an image in cameras and camera-related products in a
range of imaging applications such as personal computer cameras,
digital still cameras, security and surveillance cameras, personal
digital assistant cameras, mobile phone cameras, and cameras for
automobiles and toys that incorporate both still picture and live
video applications.

OVTI - OmniVision  $28.96

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 22.5  UCM RX    1,219   0.45  22.05   7.3%   2.0% *
SELL PUT  JUN 25    UCM RE      923   0.95  24.05  11.2%   4.0%


**************
SHFL - Shuffle Master  $23.49  *** Earnings Speculation! ***

Shuffle Master (NASDAQ:SHFL) develops, manufactures and markets
automatic card shufflers for use with card-based table games.
The company also develops and markets table games and licenses
these products to casinos.  Shuffle Master develops and markets
slot games and slot game operating systems for slot machines.
The company's quarterly earnings report is due on 5/22/03.

SHFL - Shuffle Master  $23.49

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 20    SFQ RD      58    0.35  19.65   5.7%   1.8% *
SELL PUT  JUN 22.5  SFQ RX     849    0.90  21.60   9.8%   4.2%


**************
SNDK - SanDisk  $31.36  *** "Short-Covering" Rally! ***

SanDisk (NASDAQ:SNDK) designs, manufactures, and markets flash
memory storage products that are used in a wide variety of
electronic systems.  The company has designed its flash memory
storage solutions for applications in the consumer electronics
and industrial/communications markets.  The company's products
are used in a number of rapidly growing consumer electronics
applications, such as digital cameras, PDAs, portable digital
music players, digital video recorders and smart phones, as well
as in industrial and communications applications.  The company's
products include removable CompactFlash cards, MultiMediaCards,
FlashDisk cards and Secure Digital Cards and embedded FlashDrives
and Flash ChipSets with storage capacities ranging from eight
megabytes to 1.2 gigabytes.

SNDK - Sandisk  $31.36

PLAY (sell naked put):

Action    Month &   Option    Open    Last  Cost    Max.  Simple
Req'd     Strike    Symbol    Int.    Price Basis  Yield  Yield

SELL PUT  JUN 25    SWQ RE    1,671   0.25  24.75   3.9%   1.0% TS
SELL PUT  JUN 27.5  SWQ RY      729   0.60  26.90   6.6%   2.2%
SELL PUT  JUN 30    SWQ RF      556   1.30  28.70  10.6%   4.5%


**************

BULLISH PLAYS - CREDIT SPREADS

These candidates are based on the underlying issue's technical
history or trend.  The probability of profit in these positions
may also be higher than other plays in the same strategy, due to
small disparities in option pricing however, each play should be
evaluated for portfolio suitability and reviewed with regard to
your strategic approach and trading style.

***************
DNA - Genetech  $56.09  *** New Cancer Drug! ***

Genentech (NYSE:DNA) is a biotechnology firm using human genetic
information to discover, develop, manufacture and commercialize
biotherapeutics for significant unmet medical needs.  The company
manufactures and commercializes 10 biotechnology products directly
in the United States.  These include Herceptin, Rituxan, TNKase,
Activase, Cathflo Activase, Nutropin Depot, Nutropin AQ, Nutropin
human growth hormone, Protropin and Pulmozyme.  The company also
licenses several additional products to other companies and its
product development efforts, including those of its collaborative
partners, cover a wide range of medical conditions, including
cancer, respiratory disorders, cardiovascular diseases, endocrine
disorders and inflammatory and immune problems.

DNA - Genetech  $56.09

PLAY (conservative - bullish/credit spread):

BUY  PUT  JUN-45.00  DNA-RI  OI=4991  ASK=$0.40
SELL PUT  JUN-50.00  DNA-RJ  OI=4779  BID=$0.85
INITIAL NET-CREDIT TARGET=$0.50-$0.60
POTENTIAL PROFIT(max)=11% B/E=$49.50


**************
BIO - Bio-Rad Laboratories  $56.70  *** "Mad Cow" Test-Maker! ***

Bio-Rad Laboratories (NYSE:BIO) is a multinational manufacturer
and worldwide distributor of life science research products and
clinical diagnostics products.  The firm's Life Science segment
develops, manufactures, sells and services reagents, apparatus
and instruments used for biological research.  These products are
sold to university and medical school laboratories, pharmaceutical
and biotechnology firms, food testing laboratories and government
and industrial research facilities.  The Clinical Diagnostics
segment develops, manufactures, sells and services automated test
systems, informatics systems, test kits and specialized quality
controls for the healthcare market.  These products are sold to
reference laboratories, hospital laboratories, state newborn
screening facilities, physician's laboratories and insurance and
forensic testing laboratories.

BIO - Bio-Rad Laboratories  $56.70

PLAY (conservative - bullish/credit spread):

BUY  PUT  JUN-45.00  BIO-RI  OI=354  A=$0.55
SELL PUT  JUN-50.00  BIO-RJ  OI=15   B=$0.85
INITIAL NET-CREDIT TARGET=$0.45-$0.60
POTENTIAL PROFIT(max)=9% B/E=$49.55

Editor's Note: There are large Bid/Ask spreads in this issue, due
to the recent volatility and relatively low Open Interest in some
of the options.  Traders should target a higher credit in the
spread initially, to improve the position's risk-reward outlook.


**************
BZH - Beazer Homes  $76.78  *** Homebuilder Rally Continues! ***

Beazer Homes USA (NYSE:BZH) designs, builds and markets single
family homes in the following locations within the United States:
Florida, Georgia, North Carolina, South Carolina, Tennessee,
Arizona, California, Colorado, Nevada, Texas, Maryland, Virginia,
New Jersey, and Pennsylvania.  The company designs its homes to
appeal primarily to entry-level and first time move-up homebuyers.
The company's objective is to provide its customers with homes that
incorporate quality and value while seeking to maximize its return
on invested capital.  Beazer's homebuilding and sales activities
are conducted under the name of Beazer Homes in each of its markets
except in Colorado (Sanford Homes) and Tennessee (Phillips Builders).

BZH - Beazer Homes  $76.78

PLAY (conservative - bullish/credit spread):

BUY  PUT  JUN-65.00  BZH-RM  OI=308  A=$0.40
SELL PUT  JUN-70.00  BZH-RN  OI=362  B=$0.80
INITIAL NET-CREDIT TARGET=$0.45-$0.60
POTENTIAL PROFIT(max)=9% B/E=$69.55


**************

BEARISH PLAYS - NAKED CALLS

Based on analysis of option pricing and the underlying stock's
technical background, these positions meet our fundamental
criteria for bearish "premium-selling" strategies.  Each issue
has robust option premiums, a well-defined resistance area and
a high probability of remaining below the target strike prices.
As with any recommendations, these positions should be carefully
evaluated for portfolio suitability and reviewed with regard to
your strategic approach and personal trading style.

WARNING: THE RISK IN SELLING UNCOVERED OPTIONS IS SUBSTANTIAL!

The sale of uncovered calls entails considerable financial risk,
far more than the initial margin or collateral required to open
the position.  The maximum financial obligation for the sale of a
naked option is the strike price (of the underlying stock) that
is sold.  Although this obligation is reduced by the premium from
the sale of the option, a writer of options must have the cash or
collateral equivalent of the sold strike price in reserve at all
times.  The simple fact is: stocks often experience large price
swings, exponentially increasing the margin maintenance and very
possibly causing a devastating shortfall in your portfolio.  It
is also important that you consider using trading stops on naked
option positions to help limit losses when a stock price moves in
a volatile manner.  Many professional traders suggest closing the
position when the underlying share value moves beyond the sold
strike, or using a "buy-to-close" stop order at a price that is no
more than twice the original premium received from the sold option.

***************
BSTE - Biosite  $43.75  *** Sell-Off In Progress! ***

A leader in the drive to advance diagnosis, Biosite (NASDAQ:BSTE)
is a unique research-based company dedicated to the discovery and
development of novel protein-based diagnostic tests that improve
a doctor's ability to diagnose debilitating and life-threatening
diseases.  The firm combines integrated discovery and diagnostics
businesses to access proteomics research, identify proteins with
high diagnostic utility, develop and commercialize products and
educate the medical community on new diagnostic approaches that
improve health care outcomes.  Biosite's "Triage" rapid diagnostic
tests are used in approximately 50% of U.S. hospitals and in over
40 international markets.

BSTE - Biosite  $43.75

"SPECULATIVE" PLAY (sell naked call):

Action     Month &   Option    Open   Last  Cost    Max.   Simple
Req'd      Strike    Symbol    Int.   Price Basis  Yield   Yield

SELL CALL  JUN 50    BQS FJ    360    0.60  50.60   5.1%    1.2% *
SELL CALL  JUN 45    BQS FI    589    2.05  47.05  11.4%    4.4%


**************
DCX - DaimlerChrysler AG  $30.28  *** Sector Slump! ***

DaimlerChrysler AG (NYSE:DCX) develops, manufactures, distributes
and sells a wide range of automotive products, mainly passenger
cars, light trucks and commercial vehicles.  The company also
provides financial and other services relating to its automotive
business.  It has five business segments: the Mercedes Car Group,
Chrysler Group, Commercial Vehicles, Services and Other Activities.
DaimlerChrysler offers its automotive products and related financial
services primarily in Europe and in the North American Free Trade
Agreement (NAFTA) region, which consists of the United States,
Canada and Mexico.  In 2002, the company's automotive business,
including related financial services, contributed 98% of its
revenues.  Additionally 52% is derived from sales in the United
States, 15% from sales in Germany and 16% from sales in other
countries of the European Union (EU).

DCX - DaimlerChrysler AG  $30.28

PLAY (sell naked call):

Action     Month &   Option    Open   Last  Cost    Max.   Simple
Req'd      Strike    Symbol    Int.   Price Basis  Yield   Yield

SELL CALL  JUN 32.5  DCX FZ    540    0.45  32.95   4.4%    1.4% *
SELL CALL  JUN 30    DCX FF    301    1.35  31.35  10.0%    4.3%


**************
ICST - Integrated Circuit Systems  $21.89  *** Trading Range? ***

Integrated Circuit Systems (NASDAQ:ICST) supplies a broad line
of timing products for use in personal computer motherboards and
peripheral applications.  These silicon timing devices control
multiple processes by providing and synchronizing the timing of
the computer system, including signals from the video screen,
graphics controller, memory, keyboard, microprocessor, drives
and communication ports.  The company also designs, develops and
sells silicon-timing devices for non-PC motherboard applications,
such as digital videodisk players, digital set-top boxes, digital
cameras, laser printers, flat panel displays and digital TVs.  In
addition, it offers surface acoustic wave technology to develop
high-performance products for optical networking and wireless
infrastructure markets.

ICST - Integrated Circuit Systems  $21.89

PLAY (sell naked call):

Action     Month &   Option    Open   Last  Cost    Max.   Simple
Req'd      Strike    Symbol    Int.   Price Basis  Yield   Yield

SELL CALL  JUN 25    IUY FE    105    0.30  25.30   6.1%    1.2% *
SELL CALL  JUN 22.5  IUY FX    181    1.05  23.55  12.9%    4.5%


**************
IGEN - IGEN International  $35.25  *** Premium-Selling Only! ***

IGEN International develops and markets products that incorporate
its proprietary electrochemiluminescence (ORIGEN) technology,
which permits the detection and measurement of various biological
substances.  ORIGEN provides a combination of speed, sensitivity,
flexibility and throughput in a single technology platform.  The
product is incorporated into instrument systems and other related
consumable reagents, and IGEN also offers assay development and
services used to perform analytical testing.  Products based on
ORIGEN technology address the Life Sciences, Clinical Testing and
Industrial Testing worldwide markets.

IGEN - IGEN International  $35.25

"SPECULATIVE" PLAY (sell naked call):

Action     Month &   Option    Open   Last  Cost    Max.   Simple
Req'd      Strike    Symbol    Int.   Price Basis  Yield   Yield

SELL CALL  JUN 42.5  GQ FV       864  0.75  43.25   9.7%    1.7% *
SELL CALL  JUN 40    GQ FH     4,773  1.15  41.15  11.1%    2.8%
SELL CALL  JUN 37.5  GQ FU     2,157  1.85  39.35  13.7%    4.7%


**************

BEARISH PLAYS - CREDIT SPREADS

All of these positions are favorable candidates for "bear-call"
credit spreads, based on the current price or trading range of
the underlying issue and its recent technical history or trend.
The probability of profit from these positions may be higher
than other plays in the same strategy, due to disparities in
option pricing.  However, current news and market sentiment will
have an effect on these issues, so review each play individually
and make your own decision about its future outcome.

**************
ATK - Alliant Techsystems  $51.65  *** Defense Sector ***

Alliant Techsystems (NYSE:ATK) is a supplier of aerospace and
defense products to the U.S. government, America's allies and
major prime contractors.  ATK also is a supplier of ammunition
to federal and local law enforcement agencies and commercial
markets.  ATK designs, develops and produces rocket propulsion
systems for a wide variety of U.S. Government and commercial
applications.  The firm is also the sole supplier of the reusable
solid rocket motors used on NASA's Civil Manned Space Launch
Vehicles.  ATK designs, develops and manufactures small, medium
and large caliber conventional munitions for the U.S. and allied
governments as well as for commercial applications.  The company
manufactures and develops small-caliber ammunition for the U.S.
military and its allies, federal and local law enforcement, and
commercial markets.

ATK - Alliant Techsystems  $51.65

PLAY (conservative - bearish/credit spread):

BUY  CALL  JUN-60.00  ATK-FL  OI=143  ASK=$0.20
SELL CALL  JUN-55.00  ATK-FK  OI=428  BID=$0.65
INITIAL NET-CREDIT TARGET=$0.45-$0.55
POTENTIAL PROFIT(max)=9% B/E=$55.45


**************
FNM - Fannie Mae  $71.60  *** Consolidation in Progress! ***

Federal National Mortgage Association (NYSE:FNM), commonly known
as Fannie Mae, is a company that works to assure that mortgage
money is readily available for existing and potential homeowners
in the United States.  Fannie Mae does not directly lend money
to homebuyers, but works with lenders to ensure that there is no
shortage of funds available for mortgage loans.  The method in
which Fannie Mae accomplishes this is by purchasing mortgages
from a variety of institutions that make up the primary mortgage
market.  Primary market lenders include mortgage companies,
savings and loans, commercial banks, credit unions and state and
local housing finance agencies. These are the businesses where
the mortgages are originated and the funds are loaned directly
to the borrower.  Fannie Mae then purchases the mortgage, thus
allowing the primary market lender to replenish their funds and
lend more money to homebuyers.

FNM - Fannie Mae  $71.60

PLAY (conservative - bearish/credit spread):

BUY  CALL  JUN-80.00  FNM-FP  OI=4107   ASK=$0.15
SELL CALL  JUN-75.00  FNM-FO  OI=14857  BID=$0.60
INITIAL NET-CREDIT TARGET=$0.45-$0.55
POTENTIAL PROFIT(max)=9% B/E=$75.45


**************
IP - International Paper  $36.13  *** Trading Range? ***

International Paper (NYSE:IP) is a global forest products,
paper and packaging firm that is complemented by an extensive
distribution system, with primary markets and manufacturing
operations in the United States, Canada, Europe, the Pacific
Rim and South America.  The firm's businesses are separated
into six segments: Printing Papers, Industrial and Consumer
Packaging, Distribution, Forest Products, Carter Holt Harvey
and Specialty Businesses and Other.  The firm owns or manages
approximately nine million acres of forestlands in the United
States, mostly in the South, approximately 1.5 million acres
in Brazil and has, through licenses and management agreements,
harvesting rights on government-owned timberlands in Canada
and Russia.  The company's quarterly earnings are due 4/24/03.

IP - International Paper  $36.13

PLAY (less conservative - bearish/credit spread):

BUY  CALL  JUN-40.00  IP-FH  OI=5778  ASK=$0.15
SELL CALL  JUN-37.50  IP-FU  OI=4693  BID=$0.45
INITIAL NET-CREDIT TARGET=$0.30-$0.40
POTENTIAL PROFIT(max)=14% B/E=$37.80


**************

SEE DISCLAIMER - SECTION 1

**************


************
MARKET WATCH
************

Mostly Bullish

Exelon Corp - EXC - close: 56.63 change: +0.62

WHAT TO WATCH: All the focus on the Dividend tax cut has brought
buyers to a host of electric utilities known for their high
yields.  EXC is currently yielding close more than 3% or $1.84 a
share.  While not the highest yield in the bunch shares of EXC
are at 52-week highs and approaching two-year highs.  It is
optionable.

Chart=


---

Nextel Communications - NXTL - close: 14.47 change: +0.30

WHAT TO WATCH: Once again NXTL management is offering positive
comments about the future.  Shares have rallied back above the
$14.00 level and look decent for bulls to consider long plays.
What looks really tempting is the rebound from support on the
stock's point-and-figure chart.

Chart=


---

Apache Corp - APA - close: 63.41 change: +3.04

WHAT TO WATCH: Shares of APA broke out today above resistance in
the 62.00-62.50 region.  This also produced a triple-top buy
signal on APA's point-and-figure chart.  While there maybe some
resistance at $65 and $67, the move today looks pretty strong.
One to watch.

Chart=


---

Lehman Brothers - LEH - close: 68.00 change: +1.96

WHAT TO WATCH: The XBD broker-dealer index just refuses to give
up and LEH is one of the reasons why.  The stock has been
incredibly strong, shrugging off profit taking with regular ease.
A dip back to $66.00 might be worth a look for bulls.  Bears
willing to take the heat can watch for a failed rally at natural
psychological resistance near $70.00.

Chart=



**************
MARKET POSTURE
**************

Still Not Ready

To Read The Rest of The OptionInvestor.com Market Watch Click Here
http://www.OptionInvestor.com/marketposture/mp_052103.asp


*******************
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. The quarterly
price is 99.95 which is $20 off the monthly rate.


We would like to have you as a subscriber. You may
subscribe at any time but your subscription will not
start until your free trial is over.

To subscribe you may go to our website at

www.OptionInvestor.com

and click on "subscribe" to use our secure credit
card server or you may simply send an email to

 "Contact Support"

with your credit card information,(number, exp date, name)
or you may call us at 303-797-0200 and give us the
information over the phone.

You may also fax the information to: 303-797-1333


**********
DISCLAIMER
**********

Please read our disclaimer at:
http://www.OptionInvestor.com/page/oin/aboutus/disclaimer.html


**************************************************************
ADVERTISING INFORMATION

For more information on advertising in OptionInvestor Newsletter,
or any Premier Investor Network newsletter please contact:

Contact Support

DISCLAIMER

Option Investor Inc is neither a registered Investment Advisor nor a Broker/Dealer. Readers are advised that all information is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor is it to be construed as a recommendation to buy, hold or sell (short or otherwise) any security. All opinions, analyses and information included herein are based on sources believed to be reliable and written in good faith, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we do not necessarily update such opinions, analysis or information. Owners, employees and writers may have long or short positions in the securities that are discussed.

Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report and website should be independently verified.

To ensure you continue to receive email from Option Investor please add "support@optioninvestor.com"

Option Investor Inc
PO Box 630350
Littleton, CO 80163

E-Mail Format Newsletter Archives