Stocks quoted in this article:
Today's announcement that the SEC will be looking into Lucent Technologies' (LU – 15.10) accounting practices was not shocking news. The company itself had restated some figures and began discussing the matter last November. But the news has still prompted selling, as LU gapped over one-dollar lower at the open and has proceeded to drift down further. It has lost over 10 percent at this point as a volume leader on the NYSE.
Even with a year's worth of negative news for investors, hope seems to spring eternal for LU, looking at today's options activity. The closest-to-the money front-month February 15 puts and calls have seen similar action, as 1,380 puts and 1,343 calls have traded so far today. In general, however, there has been much more call than put activity. For example, in the April series, a whopping 9,791 contracts of the April 17 call have traded. There is no correspondingly large put action for LU. It would seem that investors are expecting better times to arrive by the next quarterly earnings report.<