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by 12/28/2000 11:31 AM
Stocks quoted in this article:
This morning, a bevy of economic data was released, beginning with initial jobless claims. First-time claims for unemployment fell 23,000 to 333,000 for the week, although the number of people actually receiving benefits climbed. The four-week average number of people receiving benefits is the highest since late 1996.

Wall Street expected today's number to be closer to 4,000, but this news should not affect the stock or bond markets significantly. This week's figures are subject to more revisions than usual because 18 states used estimates, due to holiday closures.

November existing home sales rose 4.4-percent on a seasonally adjusted basis, after a decline of 3.1-percent in October. Wall Street expected a 1.4- percent increase, but the stronger sales are not expected to impact the market or the Fed's decision on interest rates. Lower mortgage rates may have fueled the larger-than-expected rise.

Consumer confidence has fallen to its lowest measure in two years. The index fell to 128.3 from 132.6 last month, indicating further slowing of the economy lays ahead. An even sharper decline occurred in consumers' expectations for the economy six months down the road, which is disconcerting. <

by 12/28/2000 10:37 AM
Stocks quoted in this article:
F5 Networks (FFIV - 10-1/2) was halted pre-open this morning as the company just released a lowered revenue announcement. FFIV stated that it expects its first-quarter revenue to fall within the $24-26 million range with a before-tax loss of 48 to 50 cents per share. The company will hold a conference call at 4:00 p.m. today.

Although options are not heavily traded on the shares, options traders currently maintain a put/call open interest ratio at a bullish 0.18 in options with up to three months of life left. Within this grouping, there currently exists 1,378 open put positions compared to 7,331 open call positions. The January 35 call represents peak open interest with 1,366 open contracts.

Although not widely covered by the Street, all 10 analysts covering the shares rate FFIV a "buy" or better. <

by 12/27/2000 5:12 PM
Stocks quoted in this article:
Telecommunications giant Sprint FON Group (FON - 20-7/16) has watched helplessly as its stock languished near a three-year low for the past couple months. Last Thursday, the stock dropped more than 13 percent to its lowest level since July 1997.

Despite the poor price action, FON call options are leading the most actives list today. Over 12,700 contracts of the in-the-money January 20 calls traded. Most of the volume crossed the tape in several large block transactions this morning. In fact, a massive 6,760-contract block executed at the ask price for a total value of $1,436,500. As the total open interest on the January 20 strike was a mere 436 contracts, today's action represents the initiation of a huge new position. Though it is difficult to tell the intentions of the trader, it appears that most of the volume went off near the ask, indicating a purchase. If so, this trader is betting that the worst is over for FON and a rally will soon follow. FON must be above 22-1/8 in order for the purchaser of these calls to profit on the option at expiration.

The Schaeffer's put/call open interest ratio (SOIR) for FON has dropped significantly over the past three sessions. The SOIR currently stands at 0.32, lower than all but 16 percent of the last 52-week's worth of readings. The drop can be attributed primarily to the closing of over 6,600 put positions and the initiation of more than 3,400 call positions.

by 12/27/2000 2:08 PM
Stocks quoted in this article:
Job cuts rose 19 percent in December in the Internet sector as the companies continued to suffer. (SALN- 2-15/16) cut 20 percent from their staff, Ask Jeeves (ASKJ- 11/16) cut 25 percent, and Sonic Foundry (SOFO- 1-13/16) cut 40 percent of their personnel.

The CBOE Internet Index (.INX- 196.66) continues to trade well-below its 10-month and 20-month moving averages. Trading is currently at levels not seen in more than two years.

Investors remain blissfully optimistic about the sector as the Schaeffer's Open Interest put/call ratio (SOIR) listlessly lingers at a modest 0.46. This reading is lower than all but a handful of such readings over the past year. Within the sector can be found securities like CMGI (CMGI- 6-1/8 ) and At Home Corp (ATHM- 5) that have more exuberant ratios at or approaching yearly lows.

by 12/27/2000 1:55 PM
Stocks quoted in this article:
Network Associates (NETA- 4) is setting two new records for its history books, but not in the direction most shareholders would prefer. After announcing on Tuesday that they would be posting an earnings' loss instead of a profit analysts had expected for the fourth quarter, the security has spiraled downward, losing more than 65 percent so far today. Trading volume is through the roof with the stock having already traded over 54 million shares.

NETA blamed the loss on a weakening customer demand and key distributors lowering inventory levels. The company is also reeling from the blow of the loss of three of their main executives. The CEO, president, and Chief Operating Officer are expected to step down. <

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