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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.


by 10/13/2000 12:05 PM
Stocks quoted in this article:
On Thursday, online advertising name DoubleClick (DCLK – 12-1/2) said that its third-quarter loss widened as expenses more than doubled. The company also announced that its advertising sales would be weaker in the first quarter of 2001.

Not surprisingly, investors have shown their displeasure with this news, as the stock is down more than five points, or over 31 percent, in late-morning action. This has sent the shares to levels not seen since early January 1999 and continued their near-term weakness. Since DCLK's near-term intraday high on September 20, it has plunged greater than 70 percent under the pressure of its downtrending five-day moving average.

On the options front this morning, 2,214 contracts have traded on the January 12-1/2 call. This near-the-money option has no open interest, so all of today's activity should become new positions. Additionally, 1,126 call contracts have crossed the tape at the out-of-the-money January 15 strike. On the put side, the out-of-the-money January 10 put has seen volume of 2,425 contracts on no open interest.


by 10/13/2000 11:47 AM
Stocks quoted in this article:
Last Wednesday, Guidant (GDT – 54), a manufacturer of pacemakers and other medical devices, announced a third-quarter earnings warning that sent the shares tumbling. For more information on GDT's toils last week, please refer to a recent Market Observation on the subject.

Last night, the company officially reported its third-quarter numbers, coming in at 40 cents per share and beating the Street's expectations by a penny per share. Moreover, the company's CEO reported that the fourth quarter should be "the best of the year" in terms of profit potential.

Despite these positive words, a slew of analysts, including those from Gruntal and Bank of America, told Dow Jones newswires this morning that they plan to reduce earnings expectations for GDT's fourth-quarter and 2001 earnings. GDT is trading almost four percent lower in late-morning activity.

by 10/13/2000 11:33 AM
Stocks quoted in this article:
Juniper Networks (JNPR – 209-1/16) manufactures and sells Internet routers for use with networking equipment. Last night after the close, the firm announced third-quarter earnings of 17 cents per share, smashing Wall Street estimates of nine cents per share. This morning, Morgan Stanley Dean Witter initiated coverage on JNPR shares with a "strong buy" rating. The stock is subsequently trading nearly five percent higher amid a surging technology market.

JNPR may face short-term technical resistance, however, as its intraday high today was defined at its overhead 20-day moving average. The security has been unable to close above this significant trendline since September 29.

Yesterday, JNPR shares saw some notable call activity, as 4,297 contracts traded on the October 190 call while 2,381 contracts changed hands on the October 210 call. Additionally, just over 2,000 positions crossed the tape on the October 230 call. The majority of yesterday's volume translated into new open interest at these front-month strikes.

by 10/13/2000 10:03 AM
Stocks quoted in this article:
Federated Department Stores (FD – 25-15/16) is the parent of such names as Bloomingdale's, Macy's, Lazarus, and Rich's. Today, FD officials announced some news regarding its Internet and catalog-based branch, Fingerhut. The company is planning a "significant downsizing" of the operations, aiming to eliminate 550, or 24 percent, of the work staff by January. As a result, FD will absorb a restructuring cost of between $75 million and $100 million in the third and fourth quarters. This restructuring will ultimately save the company around $40 million per year in overhead. The retailer maintains its long-term earnings-per-share growth goal at 13-to-15 percent.

Shortly after the open, FD was halted at yesterday's closing price of 25-15/16, with a bid price of 27 and an ask price of 29. This represents a gain of four and 11 percent, respectively. <

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