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by 10/13/2000 2:05 PM
Stocks quoted in this article:
On Thursday, Veritas Software (VRTS – 136-7/8) tallied third-quarter earnings of 16 cents per share, surpassing brokers' projections by two cents per share. This maker of software for data-storage management also announced that pro-forma fourth-quarter profit and full-year 2000 revenue will be higher than expected because of increasing demand. In response, Lehman Brothers Holdings reiterated its "buy" rating on VRTS this morning.

The stock has soared greater than 14 points, or over 12 percent, higher in mid-afternoon trading, climbing back above its 10-day and 20-day moving averages. The shares also have obtained sturdy support from their uptrending 10-month moving average, which has offered superb support on a monthly closing basis since April 1997.

The VRTS October 135 put has been active today on volume of 3,981 contracts. Open interest on this now out-of-the-money option stands at 3,783 contracts, so most of this activity could result in liquidations.


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by 10/13/2000 12:55 PM
Stocks quoted in this article:
As a follow-up to a Market Byte yesterday, KLA-Tencor (KLAC – 34-7/8) saw some significant option activity yesterday in response to its positive earnings surprise. As a result, open interest on the October 40 put rose from 996 to 6,986 contracts. This was one of the most-active puts on the Pacific Exchange yesterday.

Due to this increase in put open interest, Schaeffer's put/call open interest ratio (SOIR) on KLAC jumped from yesterday's high reading of 1.08 to an annual high of 1.34 today. This pessimism is understandable given that the shares remain 64 percent off their all-time high from early April.

In today's action, investors are still opting for puts, as over 1,000 contracts have traded at the out-of-the-money October 25 strike, which has open interest of just 17 contracts.
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by 10/13/2000 12:28 PM
Stocks quoted in this article:
Seagram (VO – 56-3/8) is riding the general wave higher with a four-percent advance so far today. However, the shares have been trending sideways since April 1999.

VO saw some heavy option activity yesterday, which resulted in a 1,900-contract increase to open interest on the November 55 put. Open interest at this strike now stands at a hefty 7,919 contracts. This heavy open interest could now serve as options-related support for the shares, which climbed above the 55 strike in late-morning trading. <
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by 10/13/2000 12:28 PM
Stocks quoted in this article:
Last night after the close, PMC-Sierra (PMCS – 168-1/16) reported pro forma third-quarter earnings of 31 cents per share, which compares favorably to Street estimates of 26 cents per share. The equity has gotten a nice boost from this news and is up over six percent in early-afternoon trading. However, the shares continue to trade below their key short-term and intermediate-term moving averages as well as their 10-month trendline.

The most-active PMCS option is the November 160 call, which has seen 1,528 contracts cross the tape so far today. Since this option has open interest of only 230 contracts, much of this activity likely represents new positions. Several mid-sized blocks have transacted near the ask. <
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by 10/13/2000 12:19 PM
Stocks quoted in this article:
Business Week has reported in its "Inside Wall Street" column that GM Hughes Electronics (GMH – 29.80) could receive a buyout bid from a group that includes Kohlberg Kravis Roberts & Co. The article states that GMH could fetch $60 to $70 per share in the buyout.

GMH has elevated by just over two points, or more than seven percent, in early afternoon trading in response to this development. The security, though, remains beneath all of its significant short-term and intermediate-term moving averages as well as its 10-month trendline. The shares also have received support of late from their upsloping 20-month moving average, which has served a perfect support on a monthly closing basis since September 1998.

In GMH's options pit today, it appears that 4,690 contracts have been rolled out from the October 35 put to the November 35 put. These are currently among the most-active puts on the AMEX. What's more, 1,344 contracts have transpired on the October 30 call. These could be liquidations, as the option has open interest of 18,287 contracts.

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