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by 10/18/2000 8:57 AM
Stocks quoted in this article:
The long awaited spin-off of biotechnology company Monsanto (MON – 20) raised $700 million in its initial public offering on Tuesday. This figure was somewhat less than the $735-$840 million range anticipated by the underwriter, Goldman Sachs. The company priced 35 million shares at $20 apiece, below the expected range of $21-to-$24 per share.

The pharmaceutical concern Pharmacia (PHA – 56-7/16) purchased MON in April. With the weakness in the broad markets, it had to be quite a task just to get the issue priced for market. The new issue could face a difficult day in today's trading.
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by 10/18/2000 8:48 AM
Stocks quoted in this article:
This morning, the Labor Department released the September Consumer Price Index results. Overall, consumer prices rose by 0.5 percent, up significantly from the 0.1-percent decline in August. The results were higher than expectations that called for a 0.4-percent rise in consumer prices. The core index, which excludes the volatile food and energy sectors, also came in above the 0.2-percent estimates with an advance of 0.3 percent.

This morning's news did not help the broader markets, which already looked to open substantially lower on earnings-related concerns. Currently, the December S&P 500 Index Futures contract (SP/Z0 - 1339.50) is lower by 20.70 points, indicating a drastically lower open. <
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by 10/18/2000 8:46 AM
Stocks quoted in this article:
i2 Technologies (ITWO – 180-1/16) exceeded analysts' third-quarter earnings expectations by two-cents per share. Yesterday after the close, the company reported earnings of 12 cents per share on net income of $28.8 million compared with $10 million, or six cents per share, during the same quarter last year. Additionally ITWO declared a two-for-one stock split, payable on December 4 to shareholders of record on Nov. 28.

The shares closed down four points, or 2.2 percent, yesterday. In after hours trading the stock sold off to 173-7/16. Schaeffer's put/call open interest ratio (SOIR) on ITWO had been rising heading into the earnings report and stood at 0.89 as of yesterday's close. <
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by 10/17/2000 3:49 PM
Stocks quoted in this article:
The PHLX Forest and Paper Product Index (FPP - 235.82) has made yet another 52-week low in today's trading, its second in a row. The FPP has fallen on hard times and is in danger of falling below 216.15, its lowest level in five years. The FPP has fallen steadily since making its all time high of 401.19 in August 1999. The 41-percent drop has been guided by the index's 10-month moving average. The index has not managed a close above this long-term trendline since December 1999.

Interestingly, even with its abysmal performance, options players are optimistic on the sector. Schaeffer's put/call open interest ratio (SOIR) on the FPP is 0.37. There are nearly three times as many open calls in the first three-month option series as open puts. This overwhelming optimism nearly matches the low at the March bottom in the FPP. As in the spring, until option players begin to capitulate to the trend by buying puts instead of continuing to try to call a bottom by buying calls, the sector will not likely bottom. When option players began to capitulate in March, the SOIR rose from its low of 0.37 to the 0.80 area, fueling a 28-percent rise in the FPP over the next 10 weeks.
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by 10/17/2000 3:40 PM
Stocks quoted in this article:
According to the Commerce Department, business inventories at the factory, wholesale, and retail levels rose by 0.7 percent in August, up from an upwardly revised 0.4-percent advance in July. August's climb was the biggest since June.

Overall, business sales were higher in August by 0.5 percent. The rise in overall inventories was boosted by a hefty 1.4-percent rise in retail inventories, the largest increase since May.

A rise in inventories could spur a slowing in the economy down the road, as businesses would need to buy less goods to deliver on sales orders, especially if inventory buildup outpaces sales. The inventory-to-sales ratio, the measure of the length of time it would take for a business to draw down its inventory, rose to 1.34 in August, its highest since September 1999.
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