Schaeffer's Options Center
Sponsored by:
Schaeffer's Daily Option Blog

by 3/7/2001 10:16 AM
Stocks quoted in this article:
Titan of the handheld computer market Palm (PALM – 21-1/16) was spun off from 3Com (COMS – 6-31/32) in early 2000. Last night after the close, the firm announced its definitive plans to purchase Extended Systems (XTND – 22-3/4) for about $264 million in stock. XTND shareholders will each receive $22 worth of PALM stock for each XTND share held. XTND makes networking products for the mobile computer market.

The Street apparently sees this as a wise investment, as PALM shares are trading approximately eight percent higher this morning. The stock remains below its weekly moving-average trendlines, however, and is butting up against short-term resistance in the form of its 20-day moving average.

On the options front, speculators are planted in the bullish camp, as Schaeffer's put/call open interest ratio (SOIR) stands at 0.35. This means that for every 100 open calls in the front three-month series, there are only 35 puts. This predilection toward call positions is continuing today, as three call strikes have already seen over 1,000 contracts change hands in the first 50 minutes of the trading day.
permalink


by 3/7/2001 10:06 AM
Stocks quoted in this article:
Toy, game, and children's apparel retailer Toys ‘R' Us (TOY – 25.20) announced fourth-quarter earnings this morning of $1.23 per share, inching past the consensus Wall Street estimate by a penny. The company also noted that it sees same-store sales growth of three percent in 2001, during which it will additionally open 20 new Babies ‘R' Us locations. Finally, TOY officials said they are comfortable with current analysts' estimates for the full fiscal year.

TOY is trading more than four percent in the black in early trading. This has taken the shares solidly above previous resistance at their 10-day and 20-day moving averages and put them within striking distance of their annual high in the 26-27 region.

With the shares now above all significant moving averages and within a chip-shot of new high territory, it is a wonder that the speculative crowd continues to assert its pessimistic sentiment on the shares. Schaeffer's put/call open interest ratio (SOIR) for TOY stands at 1.06, meaning that total put open interest outweighs total call open interest for all options expiring within the next three months. This SOIR reading ranks in the upper five percent of all ratios taken over the past 52 weeks, a sign that pessimism from the options crowd, like the stock itself, is near an annual peak. <
permalink


by 3/7/2001 9:31 AM
Stocks quoted in this article:
WorldCom (WCOM – 16-11/16) shares have jumped in response to reports in a major business publication that the company's CEO, Bernie Ebbers, may want to sell. Rumor has it that $35 per share would buy the company. The nation's second-largest long distance provider has struggled the past year, with its buyout of Sprint (FON – 21.37) denied and shares dropping 70 percent. The shares are trading near their lows, so the $35 price would be quite a premium.<
permalink

by 3/7/2001 9:30 AM
Stocks quoted in this article:
Broadcom (BRCM – 47-7/8) is dramatically lowering its expectations for this quarter, due to lessening demand for its communication chips. The company now expects to earn eight to nine cents per share, compared to much higher Street estimates of about 25 cents for the quarter.

BRCM shares rallied 75 cents yesterday, after bouncing off a new low of 40-1/4 last Thursday. Pre-market trading has the stock down almost two points.
permalink


by 3/7/2001 9:30 AM
Stocks quoted in this article:
The world's number-one maker of fiber optics, Canadian JDS Uniphase (JDSU - 28), has cut estimates for this quarter for the second time. Wall Street had already lowered earnings estimates to 17 cents per share. Now the company says 14 cents is more realistic. Sales will come in closer to 925 million dollars, rather than the expected one billion dollars. JDSU says they could meet the 16-cent per share profit estimate for the following quarter.

What's amazing is that JDSU shares are trading up about one point in pre-market action following this profit warning. That is a bullish sign.
permalink


Featured Brokers
ADVERTISEMENT
Unusual Option Volume
Option Flow
ADVERTISEMENT
ADVERTISEMENT
Most Active Stocks
Most Active Option Strikes
Largest Open Interest

Partner Center

© 2015 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.