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Options Players Look for a Snapback but Find Little Cause for Optimism

Call buyers are absent as the summer slump drones on.

There's no



At least that's the kibitzing from options strategists and traders, who are scratching their heads over a stock-market slump that feels stretched and ready to snap back, even as call-buying continues to evaporate.

"The market is due for a bounce, but there's no oomph to it anymore," said Rod Jamieson, strategist with

Everen Securities

. "The Tuesday market comeback fizzled, and the whole thing just seems tired, really oversold. It's weird and yet nobody cares."

Here's his outlook: If a sharp rally does arrive, Jamieson is looking for a "few hundred points higher from current levels to, say, 11,200 in September or October, and then followed by lower lows than we've got now. We could even see this rally take us up through the end of the year" and through worries about Y2K. At that point, technical charts will start to form a head-and-shoulders top for the


, and "after that it might run into some trouble."

One of the few eyebrow-raisers to emerge out of the Wednesday session was another massive piece in



, the second

sizable order to come down the pike from an institutional investor in the past two weeks.

At 10:22 a.m. EDT, 16,750 contracts in Iomega's August 5 puts crossed at a price of 1 1/4 ($125), down 1 1/16 ($6.25) or a "teenie" on the

American Stock Exchange

. Open interest totaled over 50,000 contracts in that strike alone.

"The buyer came in as

Bankers Trust

on the buy side and

SBC Warburg

on the sell side. It's an odd number, 16,750 contracts, and it makes me think they were moving stock against this option trade," said a Chicago pro.

Open interest in Iomega has been mounting as well, with positions built up in the August 7 1/2 calls (12,803 contracts) and August 5 calls (24,493 contracts). Neither of those options traded Tuesday.

Iomega stock was down 1/16 to 3 11/16 on volume of 247,800 shares.

@Home on the Most Actives

At least the Internet traders stuck with their negative course, judging from traffic in




The Net company's options hit the most-actives list with nearly 1,800 contracts traded in the August 45 puts, up just 1/8 ($12.50) to 11 ($1,100), as the stock traded down 3/8 to 34 1/4.

A similar-size trade in September 40 puts crossed at 7 1/2 ($750), up 3/8 ($37.50), dwarfing the strike's 772-contract open interest.

Energy in Enron

Some other hefty trades crossed in energy giant



, with over 7,000 contracts in the October 90 calls priced at 3 3/8 ($337.50), down 5/8 ($62.50). Open interest totaled 271 contracts.