Schaeffer's Option Bytes Features Microsoft, Electronic Arts, Knightsbridge Tankers, McDonald's, and New Century Financial.CINCINNATI -- Among the stocks featured in the November 10 edition of Schaeffer's Option Bytes are Microsoft (Nasdaq:MSFT MSFT Microsoft (stock symbol) MSFT Movimento Sociale Fiamma Tricolore (Italy) MSFT Multi-Stage Fitness Test MSFT Master of Science in Family Therapy MSFT Macalester Students for Fair Trade ), Electronic Arts (Nasdaq:ERTS ERTS Electronic Arts, Inc. (stock symbol) ERTS Earth Resources Technology Satellite (US NASA) ERTS Embedded Real Time Systems ERTS Enhanced Remote Transit Shed ), Knightsbridge Tankers (Nasdaq:VLCCF), McDonald's (NYSE NYSE See: New York Stock Exchange :MCD MCD Minor Civil Division MCD McDonalds (restaurant) Mcd Macedonian (linguistics) MCD Municipal Corporation of Delhi MCD Magnetic Circular Dichroism MCD Mad Cow Disease ), and New Century Financial (NYSE:NEW). Schaeffer's Option Bytes are just one of the many free market commentaries written everyday at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. Option Bytes are written throughout every trading day In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. by Schaeffer's financial analysts and traders. They are quick insights to the day's most notable market activity from an options perspective. For additional information about this report or to have it delivered to you free via email every day click on the following link. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU1M&PAGE=1 . Schaeffer's Option Bytes for Wednesday, November 10, 2004: Below are just a few of today's Option Bytes. Click here to read all of today's Option Bytes. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB PROB Probable/Probably PROB Problem PROB People's Republic of Bangladesh 1C&PAGE=1 9:53 AM Microsoft Faces Resistance Microsoft (Nasdaq:MSFT), like most stocks, has rallied over the past week. However, the rally has not been as sharp for MSFT and has brought the stock face to face with resistance. The high on July 21, the day after the one-time dividend of three dollars was announced, was 29.89. Yesterday's high was 29.89. MSFT was also stopped shy in the 30 range back in September 2003. As a matter of fact, the stock has not moved above 30 since April 1, 2002. There is option-related resistance at the 30 level as well. In the November option series, calls outnumber out·num·ber tr.v. out·num·bered, out·num·ber·ing, out·num·bers To exceed the number of; be more numerous than. outnumber Verb to exceed in number: puts at the 30 strike by a margin of 145,255 to 23,236. Looking out to the January option series, the discrepancy DISCREPANCY. A difference between one thing and another, between one writing and another; a variance. (q.v.) 2. Discrepancies are material and immaterial. between calls and puts is 321,534 to 168,463. Don't expect analyst upgrades to help get the stock through this resistance, as 21 out of 23 analysts rate the stock a "buy". 10:27 AM Electronic Arts Puts Active after Price Cuts Video-game maker Electronic Arts (Nasdaq:ERTS) gapped lower yesterday morning after announcing price cuts on many of its sports related games. ERTS gapped nearly three percent lower before bouncing back to close one percent lower. With the gap lower came increased put activity. 11,062 puts traded yesterday, which is twice the average daily put volume. The Schaeffer's put/call open interest ratio (SOIR SOIR Schaeffer's Put/Call Open Interest Ratio SOIR Simultaneous Operations on Intersecting Runways ) moved up slightly to 1.06, which is lower than 54 percent of the readings taken over the past year. The short interest ratio for ERTS is at 4.40, indicating some pessimism pessimism, philosophical opinion or doctrine that evil predominates over good; the opposite of optimism. Systematic forms of pessimism may be found in philosophy and religion. . Analysts are rather bullish Bullish Word used to describe an investor's attitude. Bullish refers to an optimistic outlook, while bearish means a pessimistic outlook. bullish on the stock with 11 out of 17 rating the stock a "buy". 11:18 AM Calls Trade Actively on Knightsbridge Tankers Yesterday, calls traded actively on Knightsbridge Tankers (Nasdaq:VLCCF), as call volume was 16.1 times heavier the daily average. More than 18,800 contracts crossed the tape, with the most active being the December 30.00 strike (QHF QHF Quintus Horatius Flaccus (Roman poet, 65-8 BC) LF). Investors exchanged more than 8,800 QHF LF contracts yesterday. A closer look into the activity reveals that the largest trade of the day occurred at 3:02 p.m. A block of 2,400 contracts traded in between the bid and the ask price, making it difficult to determine if the contracts were purchased or sold. Today VLCCF is trading 40 cents lower to $35.98. 11:46 AM Options Trade Actively on McDonald's Yesterday, options traded briskly brisk adj. brisk·er, brisk·est 1. Marked by speed, liveliness, and vigor; energetic: had a brisk walk in the park. 2. on McDonald's (NYSE:MCD), as call volume was 16.3 times heavier than average and put volume was 3.1 times heavier than average. More than 320,000 calls changed hands, with the most active being the deep in-the-money January 15.00 strike (MCD AC). Investors exchanged more than 64,800 MCD AC contracts yesterday. Nearly 4,600 put contracts crossed the tape, with the most active being the January 27.50 strike (MCD MY). Investors traded nearly 2,000 MCD MY contracts yesterday. A look at overall option activity on MCD shows that investors currently hold 68,500 open calls compared to 61,400 open puts in the front three months of activity. At last check, MCD was trading 48 cents higher to $30.10 today. 1:54 PM New Century Financial Reaches New High New Century Financial (NYSE:NEW) has reached a new 52-week high today, which also happens to be a new all-time high for the stock. Despite the extremely strong price action that the shares have experienced, investors are quite pessimistic pes·si·mism n. 1. A tendency to stress the negative or unfavorable or to take the gloomiest possible view: "We have seen too much defeatism, too much pessimism, too much of a negative approach" toward the equity. Today's option activity has been quite pessimistic with put option volume exceeding five times the average put volume for the security. Even before today, put options outstanding on NEW outnumbered Outnumbered is a British sitcom that aired on BBC One in 2007.[1] It stars Hugh Dennis and Claire Skinner as a mother and father who are outnumbered by their three children. calls by a ratio of more than 150 to 100. Also illustrating a large amount of pessimism is the high level of short interest on NEW. Total short interest represents more than 13 percent of the floated shares, which could easily help to power a short-covering rally. The stock previously found resistance around $62.75, but the environment remains ideal for the shares to keep to their upward trend. The above are just a few of today's Option Bytes. Click here to read all of today's Option Bytes. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1 Take advantage of the timely Schaeffer commentaries by signing up for their free e-newsletters -- Opening View, Market Recap and Monday Morning Outlook. Click here to have the Schaeffer's commentaries delivered to you free via email every day. http://www.schaeffersresearch.com/redirect.aspx?CODE=PRMOU1M&PAGE=1 . About Schaeffer's Investment Research (www.SchaeffersResearch.com) Schaeffer's Investment Research, founded by Bernie Schaeffer in 1981, is a financial information and trading resources company. It publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription newsletter. The firm's contrarian approach focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm's website, http://www.SchaeffersResearch.com , is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's. Click here for more details about Schaeffer's trading methodology: http://www.SchaeffersResearch.com/method. |
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