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Aether Systems (AETH - 106-7/8) provides wireless data services. The company was one of the more successful initial public offerings of 1999. From its initial price of 16, the stock soared to a peak of 345. A reversal of fortune has the shares trading below their intermediate-term 10-week moving average, a trendline not breached on a closing basis since late July.
With the shares traveling through quite a broad range of prices, there are currently many option strikes open (so many as to require three options roots). Despite the variety, there are only about 10,500 current open option positions for options with up to three month until expiration. With the shares up about 18 percent in today's market, we are noticing a pickup in volume on the out-of-the-money November 100 put (1,528 contracts) and the in-the-money November 110 put (1,401 contracts). Compared to current open interest of 236 and 86 contracts, respectively, these volumes should translate into new positions.
Schaeffer's put/call open interest ratio (SOIR) for AETH has been flirting with levels that indicate extreme optimism. Today's activity may aid in reversing that trend.