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by 10/17/2000 3:15 PM
Stocks quoted in this article:
IDEC Pharmaceuticals (IDPH – 182-11/16) has surged to a new record high in response to company's positive earnings surprise. Yesterday evening after the close, the company reported third-quarter net income of 30 cents per share, a penny better than Street forecasts.

IDPH has turned in an impressive performance recently, more than tripling in value from its late-May lows to today's all-time best. With today's move, the equity muscled past the 176 area, a level that has capped the shares since late September.

Given the stock's robust technical health, optimism from the options crowd is understandable. Schaeffer's put/call open interest ratio (SOIR) stands at a low reading of 0.39. Calls continue to captivate options players today, as over 1,000 contracts have traded on the November 180 call on open interest of just 24 contracts. In contracts, put volume is listless so far today.

by 10/17/2000 3:12 PM
Stocks quoted in this article:
Two weekly retail sales numbers released yesterday showed an increase in sales over the past few weeks.

The LJR Redbook report showed national retail sales rose 0.8 percent in the first two weeks of October, compared with the same period in September. Sales rose a seasonally-adjusted 4.1 percent from the same period in 1999.

The BTM report echoed the same sentiment. Their U.S. chain-store sales index rose 0.5 percent for the week ended October 14 on a seasonally adjusted comparable-store basis. The sales index was up 4.9 percent from the same period in 1999, compared to a 3.6-percent rise over 1999 in the previous week.

The news has not affected the downtrend in the S&P Retail Index (RLX – 728.6), which is off almost three percent on the day and has lost about 18 percent since its September 12 close.

by 10/17/2000 3:07 PM
Stocks quoted in this article:
The 30-year U.S. Treasury bond yield (TYX – 5.756) now stands at its lowest level in more than a month.

Historically speaking, the long-bond yield is near the 5.60 level, a mark below which the TYX traded for only parts of seven months - from August 1998 to February 1999. That period mostly followed the bailout of the Long-Term Capital Management hedge fund, whose massive losses threatened the stability of the financial markets.

At that time, the TYX was driven down by the buying of the 30-year Treasury bond (as bond yields move oppposite to price movements), presumably a "flight to quality" - a safe haven for money in a time of great uncertainty.

The current rally in the long bond may be driven by the same type of buying, as the Nasdaq Composite (COMP – 3201.8) is down nearly 18 percent from its September 20 close. During the same period, the TYX has fallen from 5.962.


by 10/17/2000 2:44 PM
Stocks quoted in this article:
According to First Call/Thomson Financial, 72, or 14 percent, of the companies listed on the S&P 500 Index (SPX - 1347.13) have reported earnings for the third quarter quarter. With this earnings season essentially just beginning, the early returns have 23 percent of these companies reporting positive surprises (greater than five percent above expectations), with only four percent reporting negative surprises (more than five percent below expectations).

Earnings are on pace to exceed the same quarter last year by 15.9 percent. Thus far, 79 percent of companies that have reported are above year-ago figures, while only 18 percent are below. The best performing industry groups in terms of the percentage above analysts' estimates are: technology - 12 percent higher than analysts' estimates; transportation - seven percent ahead; and consumer staples, which has beaten analysts' estimates by three percent this quarter.

by 10/17/2000 2:37 PM
Stocks quoted in this article:
The National Association of Home Builders index of sales of new, single family homes rose in October to 63, up from 61 in September. The reading was the highest since February. A number above 50 represents more home builders who see "good" sales ahead versus those who see "poor" sales. The seasonally adjusted 63 reading signifies that the home building market continues to show strength and home builders predict healthy conditions for new home sales. The heightened expectations are as a result of relatively low mortgage rates and continued high consumer confidence. The tight labor market in the U.S. has not resulted in any shortage of skilled labor as had been feared earlier in the year. The continued strength in the housing market may indicate that the Federal Reserve will not lower rates any time soon, as the economy may continue to be very strong.

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