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by 10/5/2000 12:15 PM
Stocks quoted in this article:
GM Hughes Electronics (GMH – 30.65) is a telecommunications firm, of which automaker General Motors (GM – 64-15/16) owns around 35 percent. Yesterday evening, GMH announced that its DIRECTV satellite television business added 450,000 domestic customers in the third quarter. DIRECTV subscribers now total nine million. Additionally, GMH's Latin American division added 150,000 customers during the quarter.

In related news, GMH said that its earnings for the third-quarter will come in between $90 million and $110 million, matching analysts' estimates.

Despite this slew of positive news, brokerage heavyweight Morgan Stanley Dean Witter downgraded the security. Around 10:30 this morning, the Wall Street name cut its rating on the equity from a "strong buy" to an "outperform."

In early-afternoon trading, GMH has recorded a 5.5-percent loss. GMH options pits are notably active, with over 1,000 contracts trading on the October 30, October 35, November 30, and January 40 calls. Additionally, 5,525 contracts have changed hands on the March 45 put, while nearly 6,000 contracts have crossed the tape on the January 2002 43.47 put. During Wednesday's session, the January 2002 43.47 call was the second-most active call on the CBOE, with 10,405 contracts trading.
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by 10/5/2000 12:15 PM
Stocks quoted in this article:
priceline.com (PCLN – 6-5/8) maintains an online service that allows consumers to bid on airline tickets, insurance, and other travel services. Last quarter, PCLN collaborated with WebHouse Club to offer similar service for gasoline and groceries. This morning, it was announced that WebHouse Club will be shutting its doors over the next three months. Subsequently, PCLN will be absorbing a non-cash loss, the amount of which has not been disclosed.

PCLN has dropped almost 30 percent today to record a new annual low of 6-9/16. Since its short-term peak of 105 reached in mid-March, PCLN shares have declined 94 percent.

In the options pits today, two call positions and one put are leading the action. Just under 750 contracts have traded on the October 7-1/2 call, while slightly over 500 contracts have changed hands on the November 17-1/2 call. On the put side, 445 contracts have traded at the January 2002 7-1/2 strike. <
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by 10/5/2000 12:01 PM
Stocks quoted in this article:
The Morgan Stanley Consumer Index (CMR – 529.08) is not participating in today's broad-market weakness, as the index has strengthened by just over six points. This upswing takes the CMR to its highest intraday mark since August 22 and back above its 10-week, 20-week, and 20-month moving averages. The index has finished the past four months beneath its 20-month trendline, a technically significant moving average that we view as the line of demarcation between a bull and a bear market.

Components leading the CMR higher this morning include Gillette (G – 31-13/16), up 6.2 percent; Colgate-Palmolive (CL – 48.98), up 4.3 percent; and Procter & Gamble (PG – 72-7/16), up 3.1 percent. G was upgraded from "neutral" to near-term "accumulate" and from "accumulate" to long-term "buy" by Merrill Lynch (MER – 66-11/16). MER also upgraded CL and PG to "accumulate" status from "neutral" ratings.

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by 10/5/2000 11:16 AM
Stocks quoted in this article:
Yesterday evening, Harmonic (HLIT – 14-3/4) said that it expects to report a pro forma loss of six to nine cents per share for the third quarter, which is well below analysts' estimates of a 12-cents-per-share profit. The company also said that it will likely report a loss in the fourth quarter, while the Street had expected earnings of 14 cents per share.

The stock has plunged over 34 percent on this news to hit its lowest level since April 1999. HLIT is in the midst of a intermediate-term collapse that has seen the shares relinquish 90 percent of their value since their early-March all-time high.

In HLIT's options pit, spread trades have been initiated using the October 17-1/2 and October 30 puts. The October 17-1/2 put, which had no open interest coming into today, has seen 2,825 contracts cross the tape. Over 3,000 contracts have traded on the October 30 put on open interest of 3,682 contracts.
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by 10/5/2000 9:57 AM
Stocks quoted in this article:
Yesterday after the close, Pitney Bowes (PBI – 27-1/4) said that its full-year 2000 earnings would range between $2.44 and $2.48 per share, while analysts had expected the company to post net income of $2.58 per share. This warning prompted two major brokerage firms to cut their ratings on the stock. After a delay at the open, PBI gapped 8-1/8 points lower and is presently sitting at its lowest level since January 1997.

Options players were apparently anticipating this news. Over the past few sessions, PBI's options configuration has taken a pessimistic turn. Its Schaeffer's put/call open interest ratio (SOIR) jumped from 0.29 on Monday to 0.74 today. During that time, put open interest tripled for options expiring within the next three months, while call open interest increased by only 22 percent.
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