Options Buzz
Bottom or no bottom for the market, some options traders seem to think that the rally has some short-term juice to it, but are just as wary of danger in the offing.
| Volatility Index | |
| Today | % Change |
| 36.65 | -7.68 |
| Source: ILX | |
| Nasdaq Volatility Index | |
| Today | % Change |
| 70.60 | -1.31 |
| Source: ILX | |
, the trader said. Meanwhile, Cisco (CSCO) options, as they usually do, were seeing a fair amount of volume as the stock slipped 56 cents to $19.19, moderately above its 52-week intraday low of $18.38. Call
-option buying by traders yesterday, however, has not spilled into today. SG Cowen lowered its price target on Cisco to $29 from $37 and also trimmed earnings estimates on the networking giant for fiscal 2001 and fiscal 2002. The firm said it lowered its expectations because of "continued cautious public comments from the company and overall industry weakness, we think the near-term outlook remains challenging." The heaviest trading in Cisco options was in the out-of-the-money
April 20 calls, where more than 6,000 contracts traded at the Chicago Board Options Exchange Friday morning. More than 2,400 of the April 20 calls traded on the American Stock Exchange. James Quinn of Letco, the designated primary market maker in Cisco options at the CBOE, said there was customer buying of the April 20 calls yesterday, while today it's more people selling the options. The selling today could be traders closing out positions, or taking in premium against the chance the rally will run out of steam. The April 20 calls were down 1/4 ($25) to 1 1/2 ($150) on the CBOE. Action in options expiring further out was light, indicating that traders at least for today weren't making any notable wagers on Cisco down the road.
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| Dow Jones | S&P 500 | NASDAQ | 10-Year Note |
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|---|---|---|---|---|
| 12,454.83 | 1,317.82 | 2,837.53 | 17.45 |
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