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Daily Newsletter, Wednesday, 06/04/2003

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The Option Investor Newsletter                Wednesday 06-04-2003
Copyright 2003, All rights reserved.                        1 of 2
Redistribution in any form strictly prohibited.


In Section One:

Wrap: Breakout
Futures Wrap: Blastoff
Index Trader Wrap: See Note
Weekly Fund Family Profile: Oak Associates Funds


Posted online for subscribers at http://www.OptionInvestor.com
*******************************************************************
MARKET WRAP  (view in courier font for table alignment)
*******************************************************************
      06-04-2003           High     Low     Volume Advance/Decline
DJIA     9038.98 +116.03  9057.40  8909.01 2.05 bln   2561/ 771
NASDAQ   1634.65 + 31.09  1638.57  1603.17 2.50 bln   2230/1009
S&P 100   465.20 +  1.62   465.58   461.07   Totals   4791/1780
S&P 500   986.24 + 14.68   987.85   970.72
RUS 2000  451.23 +  7.36   451.58   443.87
DJ TRANS 2556.40 + 44.37  2557.47  2503.53
VIX        22.48 +  0.03    23.80    22.37
VXN        33.01 -  0.50    34.63    32.70
TRIN       0.53
PUT/CALL   0.76
*******************************************************************

Breakout
Jonathan Levinson

The GDP revision seemed to sober the markets, and then the ISM
report kickstarted the party again, blasting past resistance and
then holding for the afternoon, at the end of which a fresh push
took the indices to new year highs on very strong volume.

Daily Chart of the INDU





The speed and ferocity of the buying had a blowoff feel to it, as
the Bollinger band violation indicates, but there was simply
nothing bearish about today's session, with the indices closing
near their session highs and printing a bullish hammers on the
candlecharts.


Daily Chart of the COMPX




All of the longer-period oscillators I follow are on buy signals
from lofty levels.  Just as bulls got shredded to pieces trying
to pick the bottom last July, bears have been unsuccessfully
trying to nail the top for weeks.  If this lesson has any
lessons, and there are many, it would be that "the trend is your
friend" and to trade what you see.

The 1st quarter GDP revision was released at 8:30, showing an
increase in overall productivity of 1.9% instead of the 1.6%
originally reported.  Buried below the headline number was the
Factory Productivity number, which was revised down to a 1.9%
gain from the 2.1% first reported, which was below analyst
expectations of a 2% gain.  Labour costs grew by 2.6% instead of
the 2.7% first reported.  The futures went from slightly positive
to slightly negative following the revision, and the yield curve
steepened.  I'd guess that bulls expected either a better
revision number or felt that the mediocre corporate results for
Q1 on the heels of a better GDP number bodes ill for Q2, as the
pace of layoffs has remained high.  This data was soon forgotten
as the ISM number was released.

The Institute for Supply Management's non-manufacturing survey
was released at 10AM, indicating that the U.S. service-sector
expanded in May.  The index rose to 54.5 in May from 50.7 in
April, exceeding expecations for 52. Readings above 50 indicate
economic expansion.  The market liked it.

In between the two reports, the Mortgage index was released,
setting new record highs for the week ended May 30, with the
Market Index (demand for home loans) +13.6%, the Purchase Index
+16.4%, and the Refi Index +12.9%.  We're watching the spike in
mortgage activity and home prices caused by the collapse in
treasury yields, with the thirty year at its lowest levels since
the Mortgage Bankers Association of America began its weekly
survey in 1990, rates at their lowest levels since 1958, and the
resulting surge in liquidity it is causing.  This is bad news for
bears, in that the rally on "bad news" has seen a surge in buying
across all asset classes, from equities to treasuries to
commodities.  With new debt being an important source of
liquidity for the financial markets, we see mortgage activity
increasing even as treasuries and equities near important
relative highs at the current stage of their respective rallies.
The blowout numbers reported this morning by the MBA portends
higher prices to come, if the theory is correct.

I discussed this when the data was released this morning in the
Market Monitor, and a reader replied: "Remember the S&L crisis in
the 80's. Congress relaxed restrictions on the industry the
floodgates opened and economy improved. When the loans collapsed
the economy slowed. When you build economic improvements on
borrowed money you had better hope earnings will appear to
service the debt. If they don't the consequences of an
overleveraged economy are dramatic. The fed's action thus far is
very speculative. If it doesn't work we will be paying for this
for years."

Indeed, the fed has been noteworthy during the past months in its
overt concerns about the prospect of "dis-inflation".  Bernanke's
comments about printing money showed complete disregard for the
threat of inflation, mentioned by Jim in his Market Wrap last
night.  I believe that the current rallies in different asset
classes are the result of the fed's intensive inflation of money
supply in an effort to spur productivity.  The long term risks of
such policy decisions are beyond the scope of this discussion,
but it should give us option investors an inkling of the
magnitude of the forces at work in the current rally.  As timing
is everything for leveraged investors, we must be patient and
follow, not fight, the prevailing market trend.  It appears
inevitable that money will have to begin to appreciate in value
at some point, but that point shows little evidence of appearing
just yet:

Weekly chart of the Ten Year Treasury Yield




The ten year yield closed at 3.291% today.

The Energy Department reported rises in gasoline, crude oil and
distillate inventories for the week ended May 30.  This data
helped lower prices across the related commodities, despite the
fact that inventories of the various petroleum products are down
significantly against their comparable years from this time last
year.

In corporate news, the New York Post reported that C is expected
to lay off up to 50 investment bankers and MWD up to 1000. The
Post said that the cuts will be spread across a broad array of
industry groups and will be mainly senior level bankers and
directors. Citigroup said, "We continue a process of targeted
reductions throughout our organization that reflects current
market realities and an ongoing review of our businesses," while
Morgan Stanley refused to comment.  Despite this, the Amex Broker
Dealers Index, the XBD, was up strongly through the session, and
a number of its component stocks posted new 52 week highs.

AOL shares were higher today as well, despite a report in the
Washington Post report to the effect that it has lost more than 1
million of its dial-up subscribers to low-cost competitors.

Without going into more detail than necessary, Martha Stewart and
broker Peter Bacanovic were indicted in the ImClone scandal on
securities violations, conspiracy and obstruction charges.  The
coverage was extensive all day, verging on saturation.  Stewart
and Bacanovic pleaded "not guilty" to the charges.

Today was another shock and awe session for bulls and bears
alike, as the indices posted huge gains from technically
significant levels.  Despite the breakouts, however, the put to
call ratio remained stubbornly high, rising throughout the
session.  Whether it was market makers buying in their short put
positions or speculators trying to catch the top, we cannot know.
However, the persistence of the put to call ratio has been one of
the characteristics of this rally.  Unlike last year, when call
volumes exceeded put volumes by a wide margin on all but the
sharpest declines, this rally shows every dip, no matter how
shallow, being met with a spike in put volumes and a relatively
high put to call ratio.  This looks like bad news for bears,
because the willingness of traders to assume a bearish stance on
every pullback means that the dips will be bought not just by
optimistic bulls, but also by shorts covering their positions.  I
believe that it was just this phenomenon, among others, that led
to the rangebound chop during the Nikkei's bear market of the
1990's.  I saw a chart of the 1992-1993 Nikkei which looked
remarkably similar to our current indices.  There was an extended
rally in the spring of 1993, followed by sideways chop into
October of that year, which only then saw a sharp plunge.

As option investors, we must be sensitive to the risk of extended
moves, be they up, sideways or down.  If the market chops its way
sideways for six months from here, long contracts will bleed
premium.  If it continues to rise, puts will get killed.  If it
plunges, so will calls.  Know yourself and know your open
positions.  In the meantime, we must trade what we see and follow
the trend.  Trading without stops is very dangerous at any time,
but particularly in the current environment.  See you at the
bell!


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

Blastoff
Jonathan Levinson

Yesterday's shorter cycles indicated further upside today, and
after a brief pause in the morning, hesitating before the ISM
announcement, they launched to new highs, with the YM futures
notably taking out and holding 9,000.  Despite some bearish
divergences noted in the market monitor, particularly in the
volatility indices, the day was bullish.  And then, in the last
half hour of the session, a massive influx of buying wiped out
the divergences and blasted the indices to new highs for the year
on heavy volume.


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

Figures rounded to the nearest point:

           R2     R1    Pivot   S1     S2
ES03M      999    993    982    975    964
YM03M     9149   9091   8998   8940   8847
NQ03M     1251   1238   1217   1204   1183


The fed continued its week-long trend of draining reserves from
the system, today announcing a reverse overnight repo of 1.25B,
allowing 5.49B in maturing repos to expire, for a total 6.74B
drain.  As noted in the Market Monitor, it looks like the
President's "strong dollar" comments might have made it through
the lead and kryptonite walls of the Marriner S. Eccles Building.
The fed's continual infusion of billions into its dealers'
reserves has had a deleterious effect on the US Dollar, and the
recent bottom in the dollar has coincided with the reversal of
the fed's aggressive expansion of liquidity via open market
operations.  Alternatively, it could be argued that the fed is
backing up the Chairman's Berlin comments yesterday about the
possible economic recovery commencing.  Listening to the fed, or
to any central bank, is all guesswork anyway, but for the moment,
the fed appears to be draining reserves even as treasuries and
equities continue their side-by-side rallies.

10 minute chart of the US Dollar Index





The US Dollar has been tracing a range around the 93.50 level,
and had begun to fade following the 8:30AM GDP revision, but then
took a shot of nitrous and blasted back up on the 10AM ISM data.
That report wasn't a blowout by any means, but the markets
clearly liked it.  The US Dollar Index could not hold the 93.70
level for long, and was back to its range for the duration of the
session until that end of day buying frenzy took off.  The
ferocity of the move makes it look like either intervention,
short covering, or both.  But the strength of the move in the US
Dollar Index and in equities are of a similar timing and
magnitude, and appear to be clearly related.

Daily chart of June gold





The ambivalence in the US Dollar reflected itself in the precious
metals, which traded sideways to lower, following the oscillator
downphase I've been discussing here.  Despite that, the miners
were up during today's session, with the XAU leading the HUI.
The Commodity Futures Index, the CRB, was fractionally lower,
with platinum, lean hogs, cotton and natural gas leading the
gainers.


Daily NQ3M candles




A higher low, higher high, oscillators turning up before testing
the rising trendline, and a Bollinger band violation, but not so
much as to make a reversal tomorrow a sure-thing.  Overall, I
could scarcely have imagined a more bullish day.  The NQ closed
above 1220, well above the long term resistance lines and pushing
for a breakout of the bear wedge.  I've left the chart
uncluttered to allow you to draw your own conclusions.  The
uptrend is clearly intact, but in my opinion it will take another
candle like that printed today to invalidate the bearish
formation we've been watching for weeks on the daily chart.


30 minute 20 day chart of the NQ3M





There was a slight pullback toward the close, and this was all it
took to bring the stochastic and MacD oscillators into a reversal
setup.  The shorter cycles (here on the 30 minute candle chart)
were way overbought by the parabolic blast of buying, and these
portend a pullback at the open. We had the same setup at
yesterday's close, and it basically left bears enough time to
close out before the buying spree resumed.  Tomorrow's another
day, but the shorter cycles portend a pullback within the context
of the uptrends printed on the longer cycles of the daily
candlechart above.


Daily ES3M candles




We have the same setup on the YM contract, which hit resistance
at 988 and closed at 986.  The candle printed mostly above the
upper Bollinger band here, and supports my expectation for some
kind of pullback at the open.  The fact that the ES was stronger
than the NQ also supports my theory that there was a component of
foreign buying involved to go along with the blast in the US
Dollar Index.

20 day 30 minute chart of the ES3M




As with the NQ, we see the shorter cycles looking for a pullback
from here.  980 will provide first support, followed by 973.


Daily YM3M candles




As with the ES, the YM's bullish hammer daily candle is mostly
above the upper Bollinger band.  All three equity futures
contracts are in firm uptrends trying to go parabolic.  No hint
of weakness from the oscillators- everything here points higher.


20 day 30 minute chart of the YM





9000 will provide first resistance, as we saw a struggle to clear
it on the way up.  Look for a pullback in the early going.

For tomorrow, traders are in a conundrum, as both bulls and bears
consider the degree of extension to the current move.  With the
bullish percent indices, breadth and sentiment measures all
topped out, the risk to bulls is reaching levels where caution is
a must.  By the same token, fighting the prevailing trend is
suicide for directional option traders.  The markets feel very
toppy, but as W.D. Gann once said, toppy markets can always
become toppier- it's never too high to buy or too low to sell, or
something to that effect.  Unless you're very comfortable with a
position, remember that cash is a position too, and preserving
capital is the first order of business.


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

Check the Site Later Tonight For Jeff's Index Trader Article
http://members.OptionInvestor.com/itrader/marketwrap/iw_060403_1.asp


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

Oak Associates Funds

This week's Fund Family Profile looks at the Oak Associates Funds
advised by Oak Associates Ltd., a fairly well known money manager
with 60 employees and more than $18 billion in total assets under
management.  In addition to managing mutual fund assets, the firm
manages assets for pension and endowment funds and high net worth
individuals.

Jim Oelschlager, president and chief investment officer, founded
Oak Associates in 1985 after successfully managing the Firestone
Tire & Rubber Company's pension funds for some 16 years.  During
1992, the firm launched two no-load funds, White Oak Growth Fund
and Pin Oak Aggressive Fund, using a similar concentrated growth
investment style that the firm uses to manage pensions and other
institutional accounts.

Jim Oelschlager is the senior member of the Oak Associates Funds
investment management team.  His 33 years of industry experience
includes 16 years as director of pension investments for a large
corporate pension plan (Firestone Tire & Rubber).  That is music
to my ears, since my background includes 5 years as the director
of pension investments for Johns Manville Corporation, so I know
what it takes to run a large pension fund.  However, Oelschlager
managed Firestone's pension assets internally, whereas, our firm
hired money managers to run various pieces of the pension trust.

Oelschlager has managed White Oak Growth Stock Fund and Pin Oak
Aggressive Stock Fund since their 1992 inception (11 years) and
is a co-portfolio manager of the two Oak Associates specialized
technology funds.  Doug MacKay, a 12-year veteran is co-manager
of Red Oak Technology Select and assistant portfolio manager of
the two Oak Associates diversified equity funds (White Oak, Pin
Oak Aggressive).  Jeff Travis, co-manager of Black Oak Emerging
Technology Fund, has 5 years experience.

The only stock fund Oelschlager isn't directly involved with is
Live Oak Health Sciences Fund, which is co-managed by Brandi K.
Allen and Mark W. Oelschlager.  Donna Barton, a 23-year veteran
of the investment industry, is Oak Associates' senior portfolio
trader.  She is also an assistant portfolio manager for the two
Oak Associates diversified equity funds.

Oak Associates mutual funds have a minimum initial investment of
$2,000 and may be purchased directly from Oak Associates (1-888-
462-5386) or through one of many fund supermarkets.  Their funds
are available on a no-load no-transaction fee (NTF) basis in all
the major online brokerage networks including Schwab's OneSource
and Fidelity's Retail FundsNetwork.  Expense ratios for each Oak
Associates fund is at or near 1.00% of assets, using Morningstar
data.

Go to www.oakassociates.com and follow the link to "Mutual Fund
Investors" to obtain complete information or to download a fund
prospectus.

Fund Overview

The Oak Associates family of funds consists of five U.S. equity
funds (two diversified stock and three specialized) as follows:

 White Oak Growth Stock (WOGSX), Large-Cap Growth
 Pin Oak Aggressive Stock (POGSX), Multi-Cap Growth
 Red Oak Technology Select (ROGSX), Technology Sector
 Emerging Technology (BOGSX), Technology Sector
 Live Oak Health Sciences (LOGSX), Health Sector

Note that Pin Oak Aggressive Stock Fund is categorized as a large
growth fund in Morningstar's system but it may be better to think
of the fund as an all-cap or multi-cap fund since its investments
include stocks from all capital sectors (large-cap to small-cap).

The Oak Associates website (www.oakassociates.com) describes the
firm as a "growth equity" manager that concentrates investments
in market sectors believed to have the greatest long-term growth
potential, focusing on key companies in those sectors.  The firm
seeks to achieve superior long-term performance for shareholders
by following a patient buy-n-hold strategy, having low portfolio
turnover, and controlling fund operating expenses.

Like "value" managers, the firm's "growth" equity style moves in
and out of favor with the market.  So, if you are considering an
investment in one of the Oak Associates mutual funds, you should
recognize that it has the potential to outperform slower growing
or stagnant stocks over time, but will likely be associated with
higher risk.  Growth equities are riskier investments than other
stocks since they usually have higher price valuations (P/E, P/B)
and make little or no dividends payments to shareholders.

More than $2 billion of the firm's assets are represented by the
Oak Associates retail fund products.  The $1.7 billion White Oak
Growth Stock Fund (WOGSX) has been Oelschlager's most successful
fund offering since his firm entered the mutual fund industry in
1992.  It seeks long-term capital growth by investing primarily
in established companies with big market caps.  The $190 million
Pin Oak Aggressive Stock Fund applies the firm's growth strategy
to the small-to-medium capitalization sectors.

Oak Associates' three other funds are specialized sector funds.
The $292 million Red Oak Technology Select Fund seeks growth of
capital over time by investing primarily in the common stock of
companies which rely extensively on technology in their product
development or operations, or that are expected to benefit from
technological advances/improvements.  Emerging Technology Fund,
on the other hand, focuses on the stocks of companies that have
"emerging" technology as the focus of their business operations.

The firm's fifth fund, Live Oak Health Sciences Fund seeks long
term appreciation through investments in common stocks of firms
engaged in the research, development, production or distribution
of products or services related to health care, medicine or the
life sciences.  Since the fund is registered as non-diversified,
it intends to only hold a few stocks.

Our Favorite Funds

Of the five Oak Associates Funds, we favor the White Oak Growth
Stock Fund (WOGSX) because of its emphasis on established large-
cap growth companies.  While the average P/E ratios of the five
funds are relatively high, the Growth Stock portfolio holds the
lowest average P/E of the five Oak Associates Funds.  Its 35.6x
average P/E ratio is still well above the S&P 500 index however.
Its average standard deviation (31.8) over the past three years
is also the lowest of the five Oak Associates funds (tracked by
Morningstar).





If you are looking for a growth stock manager that's capable of
putting up big numbers and can tolerate large NAV fluctuations,
the White Oak Growth Stock Fund may be appropriate.  From 1996
through 1999, Oelschlager put up annual returns of 32.3%, 24.3%,
39.5% and 50.1% for investors.  If you looked at this fund back
in 1999, you would have seen 4-stars or 5-stars (don't remember)
from Morningstar.

Oelschlager managed to hold on to 3.6% gain in 2000, before the
floor fell out of the tech/growth rally.  In 2001 and 2002, the
fund lost 39.1% and 40.0%, respectively, with "growth" managers
no longer in sync with the market.  The result of two bad years
has taken the fund's Morningstar overall rating down to 2 stars
today.

With tech stocks and growth investment styles rebounding so far
this year, Oelschlager is once again putting up strong results.
On a year-to-date basis through June 3, 2003, the Growth Stock
Fund has returned 22.8%, twice the return of the S&P 500 index
and good enough to rank in the top 3% of the Morningstar large-
cap growth category.

So is the White Oak Growth Stock Fund's riskier style worth the
high risk?  The answer may depend on your time horizon.  If you
can invest for 10 years or more, Oelschlager's long-term numbers
suggest the rollercoaster ride's worth taking.  For the trailing
10-year period through May 31, 2003, the Growth Stock Fund had a
10.5% annualized total return, ranking in the 10th percentile of
the large-growth category, per Morningstar.  That beat the large-
cap S&P 500 index by an average of 0.5% per year and the Russell
1000 Growth index by an average of 2.4% a year.  And those total
return figures include the market correction of 2000-2002.

Conclusion

Because value and growth tend to outperform at different periods
of time, many experts suggest you include one value fund and one
growth fund in your portfolio or invest in one that blends value
and growth characteristics.  The Oak Associates Funds are growth
managers and don't stray from their approach.  That means return
performance may be volatile in the short run, but Oelschlager is
an experienced portfolio manager, capable of leading in advances
and performing relatively well over the very long run.  So, it's
perhaps best suited to IRA accounts and retirement plans, though
its low turnover of 15% suggests it may have a place in a regular
account.

For complete information visit the www.oakassociates.com website.
Please read the prospectus carefully before you invest should you
decide to do so.

Steve Wagner
Editor, Mutual Investor
steve@mutualinvestor.com


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The Option Investor Newsletter                Wednesday 06-04-2003
Copyright 2003, All rights reserved.                        2 of 2
Redistribution in any form strictly prohibited.


In Section Two:

Stop Loss Updates: SPW
Dropped Calls: None
Dropped Puts: HDI
Play of the Day: Put - IBM
Spreads, Combinations & Premium-Selling Plays: Bulls Charge!
Market Posture: More Potpourri

Updated on the site tonight:
Market Posture: Lot's of Green



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

SPX Corp. - SPW - close: 42.14 change: +3.14 stop: 41.00*new*

On the back of yesterday's upgrade by Prudential to a market
outperform, SPW had even more positive news for investors.  The
company raised their 2003 profit forecasts to $3.40 for the year.
Consensus estimates had been for $3.36.  On that news JPM had
some positive comments for the stock and expects SPW to trade $55
in the next twelve months.  Volume was very strong and SPW added
8%, blowing past resistance at its 200-dma.  We are raising our
stop to $41.00.  We HIGHLY suggest that readers start taking
profits immediately and maybe keep a small position just to see
how far it will run. Next resistance is $45.00.

Picked on May 27th at    $36.86
Change since picked:      +5.28
Earnings Date          07/22/03 (unconfirmed)
Average Daily Volume = 1.08 mln
Chart link:



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

None


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

Harley Davidson - HDI - close: 43.96 change: +1.01 stop: 43.75

Yet another triple digit gain for the Industrials and a broad
market rally was too much for bears in HDI.  The stock broke over
minor resistance at 43.20 and stopped us out when it traded at
43.75.  Shares closed strongly but remain below very tough
resistance at $45.00, which is very apparent on both the daily
chart and the point-and-figure chart.

Picked on May 25th at   $40.81
Change since picked:     +3.15
Earnings Date         07/16/03 (unconfirmed)
Average Daily Volume = 2.73 mln
Chart link:



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*********************
PLAY OF THE DAY - PUT
*********************

Intl Business Machine - IBM - cls: 84.25 chg: +0.43 stop: 88.01

Company Description:
Big Blue is being heralded as the world's largest technology
company.  Considering their massive hardware and software
business across the globe it's not surprising.  However, IBM's
services and consulting business is growing by leaps and bounds
and is a major source of revenues.

Tuesday, June 3rd 2003 update:

Every once in a while this game we call the market can throw you
a bit of good luck.  Bears who were shorting IBM under resistance
at $90 were happy to hear that Big Blue is under yet another SEC
probe.  The company disclosed the probe last night after the bell
and the news had a very detrimental affect on the overnight
futures but by morning the broader markets had recovered and IBM
was left to feel the sting alone.  Investor sentiment appears to
be somewhat split over how to react to the news.  IBM stated that
they believe the SEC probe into IBM's revenue-recognition
practices for 2000 and 2001 is actually part of an SEC probe into
one of IBM's customers.  This particular division of retail store
point-of-sale operations is not a very large part of IBM's
business.  Many analysts speculate that if IBM had to restate
earnings for any transactions related to this customer it would
be very limited indeed.

However, the bigger issue here is investor confidence in IBM's
credibility.  The company has endured multiple SEC probes in the
last few years and Big Blue's earnings results have been
questioned before with massive stock buybacks to manage the EPS
numbers. More than one analyst stated today that there is no way
to tell if the SEC probe will widen into IBM's affairs or not.
Still, professionals on Wall Street appear divided between
downplaying the news and being more cautious on the company.  One
critic claimed that IBM's choice of words for disclosure of this
SEC probe and the company's limited guidance on the issue does
not speak well of the future.  The 4% drop today is just the
beginning if the SEC investigation gets worse for Big Blue.  More
importantly for short-term traders is investor perception of the
risk.  Rest assured that IBM will do whatever they can to hide,
mask and downplay the event.

As a follow up to Sunday's comments about the triangular wedge in
shares of IBM on a longer-term basis, this breakdown is very
bearish for the stock.  Shares closed below its 50-dma on huge
volume of 21 million shares.  Our short-term target is just
$80.00 and IBM could get there quickly as this story develops.
We're going to adjust our stop to $88.00 but more conservative
traders have alternatives (please see the chart below).  We did
note that this move creates a fresh double-bottom breakdown on
IBM's point-and-figure chart and support is in the $78-79 range.
The stock did bounce from its lows and it could see a small
rebound to $85.00 before rolling over again.  Put premiums are
going to be a lot more expensive than yesterday.  Plan
accordingly.

Play of the day comments:
Just as expected, shares of IBM rebounded to the $85.00 before
falling back.  The bottom of the window, or gap down, is now
overhead resistance.  Super conservative traders could put their
stops just above the $85.00 mark.  We're going to leave ours at
$88 for now.  We're adding IBM as the play of the day for three
reasons.  First, the continuous lack of participation in any
market rally can hardly be called bullish.  Second, the failed
rally at resistance is a great entry point.  Third, we continue
to be awed by the strength of this market and can't imagine the
rally can continue much further without a decent consolidation
(if only to tag the bottom of its rising channel before climbing
higher again).

Suggested Option:
There is about two and a half weeks left for June options so we'll
list them but our preference would be for July's.

BUY PUT JUN 85 IBM-RQ OI=32878 at $2.40 SL=1.20
BUY PUT JUN 80 IBM-RP OI=19258 at $0.65 SL=0.00
BUY PUT JUL 85 IBM-SQ OI=33550 at $3.90 SL=1.85
BUY PUT JUL 80 IBM-SP OI=26331 at $1.85 SL=0.90

Annotated Chart of IBM:




Picked on May 29th at $87.36
Change since picked:   -3.11
Earnings Date       04/14/03 (confirmed)
Average Daily Volume = 8.2 Million
Chart link:



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

Bulls Charge!
By Ray Cummins

Stock soared again Wednesday as positive economic data spurred
investors into a broad-based buying frenzy.

The Dow Jones Industrial Average jumped 116 points to 9,038, its
first close above 9000 in 2003.  The NASDAQ Composite added 31
points to finish at 1,634, its highest level in over a year, on
strength in software and networking shares.  The Standard & Poor's
500 Index rose 14 points to 986 with the airline sector among the
best performers.  Trading was active with over 1.6 billion shares
changing hands on the New York Stock Exchange while roughly 2.48
billion shares traded on the NASDAQ.  Advancers outpaced decliners
by a 2 to 1 ratio on the technology exchange and by almost 3 to 1
on the Big Board.  Government bonds were under pressure with the
rally in stocks but finished higher amid expectations that a rate
cut may be in the offing when the Federal Reserve meets to decide
on monetary policy later in the month.  The 10-year Treasury note
was up 10/32 to yield 3.30%.

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

SUMMARY OF CURRENT POSITIONS - AS OF 6/03/03

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

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  32.50   $0.65   8.35%   3.86%
AVID     JUN    22   22.10  35.77   $0.40   4.47%   1.81%
BBY      JUN    32   31.60  39.20   $0.90   5.14%   2.85%
COF      JUN    37   37.80  49.94   $0.70   4.58%   1.85%
IMCLE    JUN    15   14.65  33.55   $0.35   5.04%   2.39%
MRVL     JUN    20   19.50  31.13   $0.50   6.28%   2.56%
SFNT     JUN    20   19.65  27.02   $0.35   4.36%   1.78%
OVTI     JUN    20   19.45  32.58   $0.55   6.28%   2.83%
APPX     JUN    25   24.55  32.50   $0.45   6.54%   1.83%
ANPI     JUN    22   22.25  30.20   $0.25   4.20%   1.12%
JCOM     JUN    25   24.55  33.59   $0.45   6.55%   1.83%
MO       JUN    37   36.60  42.72   $0.90   5.92%   2.46%
MRVL     JUN    22   22.10  31.13   $0.40   6.03%   1.81%
OVTI     JUN    22   22.05  32.58   $0.45   7.31%   2.04%
SHFL     JUN    20   19.70  26.50   $0.30   4.90%   1.52%
SNDK     JUN    27   26.90  36.44   $0.60   6.56%   2.23%
ANPI     JUN    22   22.00  30.20   $0.50  10.25%   2.27%
CELG     JUN    25   24.45  31.92   $0.55  10.38%   2.25%
CREE     JUN    20   19.65  25.40   $0.35   7.05%   1.78%
IMCLE    JUN    17   17.15  33.55   $0.35   8.95%   2.04%
JCOM     JUN    30   29.25  33.59   $0.75  10.18%   2.56%
MERQ     JUN    35   34.60  39.73   $0.40   4.45%   1.16%
OVTI     JUN    25   24.65  32.58   $0.35   6.44%   1.42%
SEPR     JUN    20   19.40  23.31   $0.60   11.67%  3.09%
TTWO     JUN    22   22.15  24.91   $0.35   6.52%   1.58%
MIK      JUN    32   32.05  37.09   $0.45   5.31%   1.40%


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

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

DPMI     JUN    22   22.85  20.51    $0.35   5.35%  1.53%
PPDI     JUN    30   30.60  28.04    $0.60   4.82%  1.96%
BSTE     JUN    50   50.60  42.60    $0.60   5.13%  1.19%
ICST     JUN    25   25.30  27.15   ($1.85)  0.00%  1.19% *
DCX      JUN    32   32.95  31.65    $0.45   4.46%  1.37%
IGEN     JUN    42   43.25  34.85    $0.75   9.75%  1.73%
IGEN     JUN    42   43.25  34.85    $0.40   6.60%  0.92%

Integrated Circuit Systems (NASDAQ:ICST) was closed during
Monday's rally for a much smaller loss than the portfolio
summary reflects.


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

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

BJS     38.63  39.74   JUN   32  35  0.25  34.75  $0.25  Open
LEH     65.32  71.84   JUN   55  60  0.55  59.45  $0.55  Open
DNA     56.09  66.25   JUN   50  55  0.50  54.50  $0.50  Open
BIO     56.70  58.50   JUN   50  55  0.45  54.55  $0.45  Open
BZH     76.70  86.80   JUN   65  70  0.45  69.55  $0.45  Open
PLMD    37.08  35.93   JUN   30  35  0.65  34.35  $0.65  Open
CHIR    44.12  44.80   JUN   40  42  0.30  42.10  $0.30  Open
UNH     95.46  95.99   JUN   85  90  0.55  89.45  $0.55  Open


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

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

FRX     51.18  50.15   JUN  60  55   0.50  55.50  $0.50   Open
KKD     31.45  35.25   JUN  40  35   0.65  35.65  $0.40  Closed
ATK     51.65  49.00   JUN  60  55   0.45  55.45  $0.45   Open
FNM     71.60  74.61   JUN  80  75   0.45  75.45  $0.45   Open?
IP      36.13  36.95   JUN  40  37   0.30  37.80  $0.30   Open?
AZO     83.74  81.87   JUN  95  90   0.45  90.45  $0.45   Open
ITW     62.61  64.09   JUN  70  65   0.50  65.50  $0.50   Open?
MMM    125.01 126.18   JUN 135 130   0.45 130.45  $0.45   Open

Conservative traders should consider closing the bearish spread
in Krispy Kreme Donuts (NYSE:KKD) as the issue has moved above
the sold call at $35.  Illinois Tool Works (NYSE:ITW), Federal
National Mortgage (NYSE:FNM), and International Paper (NYSE:IP)
are "early-exit" candidates.  As noted previously, spreads on
Anadarko Petroleum (NYSE:APC) and Devon Energy (NYSE:DVN) have
been closed to limit losses.


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

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

GYI     32.43  38.16   JUL     35    30    (0.10)   4.00    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  28.24   JUN     25    25     2.90    3.40   Closed

The "Reader's Request" straddle in Sony (NYSE:SNE) has previously
been closed 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  $31.83  *** 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  $31.83

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    AUJ RE    6,085   0.45  24.55  12.6%   1.8% *
SELL PUT  JUN 30    AUJ RF      503   1.30  28.70  20.3%   4.5%


**************
BSX - Boston Scientific  $55.30  *** Stent Maker ***

Boston Scientific (NYSE:BSX) is a global developer, manufacturer
and marketer of less-invasive medical devices.  The firm's unique
products are offered by two major business groups, Cardiovascular
and Endosurgery.  The Cardiovascular segment focuses on products
and technologies for use in the firm's interventional cardiology,
interventional radiology, peripheral vascular and neurovascular
procedures.  The Endosurgery organization focuses on products and
technologies for use in oncology, vascular surgery, endoscopy,
urology and gynecology procedures.

BSX - Boston Scientific  $55.30

PLAY (sell naked put):

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

SELL PUT  JUN 42.5  BSX RV    9,752   0.35  42.15   5.8%   0.8% *
SELL PUT  JUN 45    BSX RI   28,890   0.50  44.50   7.7%   1.1%
SELL PUT  JUN 47.5  BSX RW    5,110   0.75  46.75   9.4%   1.6%


**************
CELG - Celgene  $32.09  *** Bullish Biotech! ***

Celgene (NASDAQ:CELG) is a commercial-stage biopharmaceutical
company.  The company is primarily engaged in the discovery,
development and commercialization of small molecule drugs that
are designed to treat cancer and immunological diseases through
gene and protein regulation. Small molecule drugs are man-made,
chemically synthesized drugs that, because of their relatively
small size, can typically be administered orally.  The firm's
drugs are designed to modulate multiple disease-related genes,
including cytokines (which are proteins) such as Tumor Necrosis
Factor alpha, or TNF(alpha), growth factor genes such as those
that control angiogenesis, blood vessel formation and apoptosis
genes.  Because the company's drugs can be administered orally,
they have the potential to advance the standard of care beyond
current injectible protein drugs that inhibit TNF (alpha) and
other disease-causing cytokines.

CELG - Celgene  $32.09

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    LQH RE    6,392   0.25  24.75   7.1%   1.0% *
SELL PUT  JUN 30    LQH RF    7,539   1.20  28.80  19.1%   4.2%
SELL PUT  JUL 25    LQH SE    1,703   0.80  24.20   7.7%   3.3%


**************
COF - Capital One  $51.98  *** Rally Resumes! ***

Capital One Financial (NYSE:COF) is a holding company whose major
subsidiaries market a variety of financial products and services
to consumers using its proprietary information-based strategy.
The company's primary business is consumer lending, with a focus
on credit cards, but including other consumer lending activities
such as unsecured installment lending and automobile financing.
The company's principal subsidiary, Capital One Bank, a limited
purpose, state-chartered credit card bank, offers credit card
products.  Capital One, F.S.B., a federally chartered bank, offers
consumer lending and deposit products.  Capital One Services, the
other major subsidiary, provides various operating, administrative
and business services to the company and its subsidiaries.

COF - Capital One  $51.98

PLAY (sell naked put):

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

SELL PUT  JUN 45    COF RI    5,557   0.45  44.55   6.0%   1.0% *
SELL PUT  JUN 47.5  COF RW    2,044   0.95  46.55  10.5%   2.0%
SELL PUT  JUN 50    COF RJ    2,634   1.70  48.30  15.8%   3.5%


**************
CYMI - Cymer  $35.18  *** On The Move! ***

Cymer (NASADQ:CYMI) is a supplier of excimer light sources, the
essential light source for deep ultraviolet photolithography
systems.  DUV lithography is a key technology that has allowed
the semiconductor industry to meet the exact specifications and
manufacturing requirements for volume production of advanced
semiconductor chips.  The firm's light sources are incorporated
into step-and-repeat (steppers) and step-and-scan (scanners)
photolithography systems for use in the manufacture of various
semiconductors with critical feature sizes below 0.35 microns.
Cymer's products consist of photolithography light sources,
replacement parts and service.  The firm maintains a worldwide
service organization that supports its installed base of light
sources.

CYMI - Cymer  $35.18

PLAY (sell naked put):

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

SELL PUT  JUN 30    CQG RF    4,907   0.35  29.65   7.2%   1.2% *
SELL PUT  JUN 35    CQG RG       96   1.55  33.45  19.1%   4.6%


**************
JCOM - j2 Global Communications  $35.50  *** New High Coming? ***

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  $35.50

PLAY (sell naked put):

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

SELL PUT  JUN 30    JQF RF    1,785   0.35  29.65   7.4%   1.2% *
SELL PUT  JUN 35    JQF RG      380   1.85  33.15  22.6%   5.6%


**************
KLAC - KLA Tencor  $49.11  *** Chip Sector Rally! ***

KLA-Tencor (NASDAQ:KLAC) is a supplier of process control and
yield management solutions for the semiconductor and related
microelectronics industries.  The company's large portfolio
of products, software, analysis, services and expertise is
designed to help integrated circuit manufacturers manage yield
throughout the entire wafer fabrication process, from research
and development to final mass production yield analysis.  The
company offers a broad spectrum of products and services that
are used by every major semiconductor manufacturer in the world.
These customers turn to the company for in-line wafer defect
monitoring; reticle and photomask defect inspection; CD SEM
metrology; wafer overlay; film and surface measurement; and
overall yield and fab-wide data analysis.

KLAC - KLA Tencor  $49.11

PLAY (sell naked put):

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

SELL PUT  JUN 42.5  KCQ RV    7,164   0.45  42.05   6.3%   1.1% *
SELL PUT  JUN 45    KCQ RI    9,089   0.80  44.20   9.3%   1.8%
SELL PUT  JUN 47.5  KCQ RT      768   1.40  46.10  13.7%   3.0%


**************
MERQ - Mercury Interactive  $41.56  *** New 7-Month High! ***

Mercury Interactive (NASDAQ:MERQ) is a provider of integrated
performance management solutions that enable businesses to test
and monitor their Web-based applications.  Its software products
and hosted services help Global 2000 companies enhance the user
experience by improving the performance, availability, reliability
and scalability of their Web-based applications.  Its many hosted
services provide its customers with a cost-effective solution that
quickly meets business needs without dedicating significant time
and internal resources.  Its integrated performance management
solutions enable customers to more quickly identify and correct
problems before users experience them.  The company also provides
outsourced load testing and Web performance monitoring services
that complement its software products.

MERQ - Mercury Interactive  $41.56

PLAY (sell naked put):

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

SELL PUT  JUN 37.5  RQB RT    1,357   0.40  37.10   5.9%   1.1% *
SELL PUT  JUN 40    RQB RH      952   0.90  39.10  10.7%   2.3%
SELL PUT  JUL 35    RQB SG    2,102   0.80  34.20   5.1%   2.3%


**************
NVLS - Novellus Systems  $37.57  *** New Trading Range! ***

Novellus Systems (NASDAQ:NVLS) manufactures, sells and services
semiconductor processing equipment.  The company's products are
comprised primarily of advanced systems used to deposit thin
conductive and insulating films on semiconductor devices, as well
as equipment for preparing the device surface prior to these
deposition processes.  Novellus is a supplier of high productivity
deposition and surface preparation systems used in the fabrication
of integrated circuits.  Chemical Vapor Deposition systems employ
a chemical plasma to deposit all of the dielectric (insulating)
layers and certain of the metal (conductive) layers on the surface
of a semiconductor wafer.  Physical Vapor Deposition systems are
used to deposit conductive metal layers by sputtering metallic
atoms from the surface of a target source via high DC power.
Electrofill systems are used for depositing copper conductive
layers in a dual damascene design architecture using an aqueous
solution.

NVLS - Novellus Systems  $37.57

PLAY (sell naked put):

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

SELL PUT  JUN 32.5  NLQ RZ    3,748   0.30  32.20   5.6%   0.9% *
SELL PUT  JUN 35    NLQ RG    3,221   0.70  34.30  10.1%   2.0%
SELL PUT  JUN 37.5  NLQ RU      728   1.45  36.05  16.8%   4.0%


**************
SEPR - Sepracor  $23.98  *** 52-Week High! ***

Sepracor (NASDAQ:SEPR) is a research-based pharmaceutical company
dedicated to treating and preventing human disease through the
discovery, development and commercialization of pharmaceutical
compounds, including product candidates directed toward serving
unmet medical needs.  The firm's proprietary compounds are either
single-isomer or active metabolite forms of existing drugs, which
Sepracor refers to as improved chemical entities, or new chemical
entity compounds, which are unrelated to current products.

SEPR - Sepracor  $23.98

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    ERQ RD    6,132   0.40  19.60  12.6%   2.0% *
SELL PUT  JUN 22.5  ERQ RX    1,742   1.00  21.50  20.9%   4.7%
SELL PUT  JUL 17.5  ERQ SW    1,480   0.45  17.05   5.9%   2.6%


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

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.

***************
BBY - Best Buy Company  $40.47  *** Bullish Retailer! ***

Best Buy Company (NYSE:BBY) is specialty retailer of consumer
electronics, personal computers, entertainment software and
appliances.  Best Buy operates retail stores and commercial
Websites under the brand names Best Buy, Media Play, On Cue,
Sam Goody, Suncoast, Magnolia Hi-Fi and Future Shop.  The firm
operates three segments: Best Buy, Musicland and International.
Best Buy is mainly a specialty retailer of consumer electronics,
home office equipment, entertainment software and appliances.
Also included in the Best Buy segment is Seattle-based Magnolia
Hi-Fi, a high-end retailer of audio and video products.  Their
Musicland segment is primarily a mall-based retailer of movies,
prerecorded music, video games and other entertainment-related
products.  The International segment consists of Future Shop, a
specialty retailer of consumer electronics, home office equipment,
entertainment software and appliances with operations in Canada.

BBY - Best Buy Company  $40.47

PLAY (less conservative - bullish/credit spread):

BUY  PUT  JUN-35.00  BBY-RG  OI=6870  A=$0.30
SELL PUT  JUN-37.50  BBY-RU  OI=3484  B=$0.65
INITIAL NET-CREDIT TARGET=$0.35-$0.40
POTENTIAL PROFIT(max)=16% B/E=$37.15


**************
BGEN - Biogen  $45.99  *** Biotech Break-Out! ***

Biogen (NASDAQ:BGEN) is a biopharmaceutical company principally
engaged in the business of developing, manufacturing and marketing
drugs for human healthcare.  The firm derives revenues from sales
of its Avonex (Interferon beta-1a) product for the treatment of
relapsing forms of multiple sclerosis (MS) and from royalties on
worldwide sales by its licensees of a number of products covered
under patents it controls.  In addition, Biogen has a number of
ongoing research programs and a pipeline of development-stage
products, the furthest along of which, Amevive (alefacept), is
being considered for approval by the United States Food and Drug
Administration and regulatory authorities in the European Union
and Canada for the treatment of moderate to severe psoriasis.

BGEN - Biogen  $45.99

PLAY (conservative - bullish/credit spread):

BUY  PUT  JUN-40.00  BGQ-RH  OI=2000  ASK=$0.25
SELL PUT  JUN-42.50  BGQ-RV  OI=2784  BID=$0.50
INITIAL NET-CREDIT TARGET=$0.25-$0.35
POTENTIAL PROFIT(max)=11% B/E=$42.25


**************
GILD - Gilead Sciences  $51.10  *** Viread Expands In EU! ***

Gilead Sciences (NASDAQ:GILD) is an independent biopharmaceutical
company that discovers, develops and commercializes therapeutics
to advance the care of patients suffering from life-threatening
diseases.  The company has five products that are marketed in the
United States and in other countries worldwide.  These are Viread,
a drug for treating HIV infection; AmBisome, a drug for treating
and preventing life-threatening fungal infections; Tamiflu, a drug
for treating and preventing influenza; Vistide, a drug for treating
cytomegalovirus (or CMV) retinitis in AIDS patients, and DaunoXome,
a drug for treating AIDS-related Kaposi's sarcoma.

GILD - Gilead Sciences  $51.10

PLAY (less conservative - bullish/credit spread):

BUY  PUT  JUN-45.00  GDQ-RI  OI=6852  ASK=$0.45
SELL PUT  JUN-47.50  GDQ-RT  OI=1586  BID=$0.75
INITIAL NET-CREDIT TARGET=$0.30-$0.40
POTENTIAL PROFIT(max)=14% B/E=$47.20


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

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.

***************
DCX - DaimlerChrysler AG  $30.75  *** Profit Warning! ***

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.

DCX - DaimlerChrysler AG  $30.75

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     995   0.25  32.75   4.4%    0.8% *
SELL CALL  JUN 30    DCX FF     623   1.40  31.40  18.4%    4.5%
SELL CALL  JUL 32.5  DCX GZ   1,013   0.75  33.25   4.6%    2.3%


**************
FCN - FTI Consulting  $35.18  *** Sell-Off In Progress! ***

FTI Consulting (NYSE:FCN) is a multi-disciplined consulting firm
with practices in the areas of financial restructuring, litigation
consulting and engineering and scientific investigation.  FTI
serves businesses, lenders, investors, insurers and their legal
counsel in adverse circumstances, such as class action lawsuits,
financial restructurings and bankruptcy proceedings and accident
investigations.  The company has organized its business into three
major divisions.  The Financial Consulting division offers expert
testimony, cost benefit analysis, damage assessment, competition
analysis and business valuations.  The Applied Sciences division
offers forensic engineering and scientific investigation services.
The Litigation Consulting division advises clients in all phases
of litigation, including discovery, jury selection, preparation
for trial and the actual trial services.

FCN - FTI Consulting  $35.18

PLAY (sell naked call):

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

SELL CALL  JUN 40    FCN FH    1,329  0.45  40.45   8.8%    1.1% *
SELL CALL  JUN 35    FCN FG      459  1.80  36.80  21.3%    4.9%
SELL CALL  JUL 40    FCN GH      316  1.00  41.00   6.7%    2.4%


**************
GM - General Motors  $35.85  *** Sector Slump! ***

General Motors Corporation (NYSE:GM) provides automotive-related
products and services by primarily designing, manufacturing and
marketing vehicles, as well as providing communications services
and financial services.  The firm operates in two major segments,
Automotive, Communications Services and Other Operations, and
Financing and Insurance Operations.  Its automotive subsidiary
consists of General Motors Automotive, which encompasses global
regions: North America, Europe, Latin America/Africa/Mid-East
and GM Asia Pacific.  The communication services include digital
entertainment, information and communications services and the
satellite-based private business networks.  GM's other operations
include the design, manufacturing and marketing of locomotives
and heavy-duty transmissions, the elimination of inter-segment
transactions and certain corporate activities.  GM's Financing
and Insurance Operations primarily relate to General Motors
Acceptance Corporation.

GM - General Motors  $35.85

PLAY (sell naked call):

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

SELL CALL  JUN 37.5  GM FU    20,572  0.30  37.80   4.4%    0.8% *
SELL CALL  JUN 35    GM FG    24,390  1.40  36.40  16.0%    3.8%


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

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.

**************
MXIM - Maxim Integrated Prod.  $39.15  *** Mediocre Outlook? ***

Maxim Integrated Products (NASDAQ:MXIM) designs, develops, makes
and markets a broad range of linear and mixed-signal integrated
circuits, commonly referred to as analog circuits.  The company
also provides a range of high-frequency design processes and
capabilities that can be used in custom design.  Maxim's products
include data converters, interface circuits, microprocessor
supervisors, operational amplifiers, power supplies, multiplexers,
delay lines, real-time clocks, microcontrollers, switches, battery
chargers, battery management circuits, radio frequency circuits,
fiber-optic transceivers, sensors and voltage references.  The
firm's unique products are sold to customers in various markets
including automotive, communications, consumer, industrial control,
instrumentation and data processing.

MXIM - Maxim Integrated Prod.  $39.15

PLAY (speculative - bearish/credit spread):

BUY  CALL  JUN-45.00  XIQ-FI  OI=2797  ASK=$0.10
SELL CALL  JUN-40.00  XIQ-FH  OI=5006  BID=$1.00
INITIAL NET-CREDIT TARGET=$0.80-$1.00
POTENTIAL PROFIT(max)=19% B/E=$40.80

Editor's Note:  Maxim reported earnings after the close of trading
on Wednesday, so wait until a bearish trend has been confirmed on
Thursday morning before initiating this position.


**************
NOC - Northrop Grumman  86.30  *** No Offense In Defense Stocks ***

Northrop Grumman (NYSE:NOC) is a global defense firm that provides
unique technologically advanced products, services and solutions
in defense and commercial electronics, defense systems integration,
information technology and nuclear and non-nuclear shipbuilding
and systems.  Northrop Grumman has operations in 44 states and 25
countries, serving U.S. and international military, government and
commercial customers.  Northrop Grumman is aligned into six main
business sectors: Electronic Systems, Information Technology,
Integrated Systems, Ship Systems, Newport News and Component
Technologies.

NOC - Northrop Grumman  86.30

PLAY (less conservative - bearish/credit spread):

BUY  CALL  JUN-95.00  NOC-FS  OI=1180   ASK=$0.15
SELL CALL  JUN-90.00  NOC-FR  OI=11639  BID=$0.75
INITIAL NET-CREDIT TARGET=$0.60-$0.70
POTENTIAL PROFIT(max)=14% B/E=$90.60


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

SEE DISCLAIMER - SECTION 1

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


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

More Potpourri

Benchmark Electronic - BHE - close: 29.86 change: +1.57

WHAT TO WATCH: We like the way this stock is shaping up.  After
the two month pull back, BHE appears to have found its bottom and
is trying to breakout over $30.00 again.  The PnF also shows
promise.  Volume appears to be picking up on the positive days as
well.

Chart=


---

Bank of America - BAC - close: 76.66 change: +0.95

WHAT TO WATCH: The financial indices have continued to climb
higher and doing its part to help are shares of BAC.  The stock
has broken out from consolidating below the $75 level for weeks.
This is a crucial area for it as 76.50-77.00 have been resistance
levels in the past.  Its MACD just produced a bullish buy signal.

Chart=


---

SLM Corp - SLM - close: 121.00 change: +0.65

WHAT TO WATCH: Better known as Sallie Mae, this company's stock
is getting closer to its 3-for-1 stock split.  Shares have been
very strong and despite being terribly overbought aggressive
traders might attempt new longs if they watch their stops.  June
20th is the payable date for the split.

Chart=


---

Intl Game Technology - IGT - close: 90.60 change: +5.25

WHAT TO WATCH: Talking about stock splits, we have to mention
this one.  Before the bell this morning, IGT announced a 4-for-1
stock split and its first ever cash dividend.  The split will be
July 2nd and the cash dividend will be paid later in July.  The
close over $90 today was on strong volume and we would not be
surprised to see IGT at $100 by the time its split rolled around.

Chart=


---

Northrup Gruman - NOC - close: 86.30 change: -1.00

WHAT TO WATCH: A few of the larger defense stocks are under
performing the broader markets.  NOC is one of them.  The stock
closed under its 50-dma today on decent volume.  It looks like a
put play candidate with a target of $80.00.  Something to watch.

Chart=



====================================
RADAR SCREEN - more stocks to watch
====================================

VZ $39.57 - It's still climbing.  Shares are about to test
$40.00.  If VZ pulls back, a bounce near $38.00-38.25 might be
worth a look.

DAL $15.10 - The airline stocks have been recovering and DAL's
8.8% gain today put it over the $15 mark.  Its MACD is about to
turn positive again.  Aggressive players might want to keep an
eye on this group although many airlines have already seen big
moves.

$SOX 394 - The SOX semiconductor index is breaking out through
the top of its trading channel and quickly approaching tough
resistance at 400.  While the SOX isn't tradeable per se traders
can trade options, holders, or their favorite chip stock.

RML $20.77 - Sure enough...we suggested a pull back to $20.00 as
a potential entry point for bulls and they grabbed it.  RML tends
to be lightly traded and the last three days have been pretty
volatile compared to the last several weeks.


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

Lot's of Green

To Read The Rest of The OptionInvestor.com Market Watch Click Here
http://www.OptionInvestor.com/marketposture/mp_060403.asp


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