Schaeffer's Midday Options Update Features Home Depot, Wind River Systems, RealNetworks, Calpine, and Research in Motion Limited.

CINCINNATI -- Today's Schaeffer's Midday Options Update Features Home Depot (NYSE:HD), Wind River Systems (Nasdaq:WIND), RealNetworks (Nasdaq:RNWK), Calpine (NYSE:CPN), and Research in Motion Limited (Nasdaq:RIMM). The Midday Options Update contains a brief commentary on the day's most notable activity and a table listing the most active calls and puts for the day. The Midday Options Update is published every day at www.SchaeffersResearch.com - the home of Bernie Schaeffer and Schaeffer's Investment Research. 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=PROB1M&PAGE=1

Schaeffer's Midday Options Update for Tuesday: Is Research in Motion Set to RIMM Out?

With oil prices continuing to slip lower, traders were left to concentrate on the fresh round of economic data released today. Digging into the data, consumer prices fell 0.1 percent in July, logging their first decline since November 2003. Excluding food and energy costs, the Core Index rose 0.1 percent, arriving below economist expectations for a 0.2-percent rise. Elsewhere, housing starts added 8.3 percent in August, rising over June's revised 1.826 million pace. The increase surprised economists who were expecting a much smaller increase of about 1.88 million.

To dig further into the numbers please visit: http://www.schaeffersresearch.com/wire?ID=10854.

Following on the heels of the housing report, home-improvement retailing giant Home Depot (NYSE:HD) reported second-quarter results that topped the Street's view by six cents per share and revised its full-year earnings projection higher. The company stated that 2004 earnings could rise as much as 17 percent. HD is trading up more than three percent just before midday.

For a closer look at the HD earnings report check out: http://www.schaeffersresearch.com/wire?ID=10856.

In continuing earnings coverage, Wind River Systems (Nasdaq:WIND) breezed more than 18 percent higher after the company posted second-quarter earnings of $2.3 million, or three cents per share. Excluding items, WIND posted a profit of four cents per share compared with a five-cent loss in the same quarter last year and the Street's view for a two-cent loss. Revenue rose 18 percent to $59.4 million over the prior year. Meanwhile, company officials projected third-quarter earnings of breakeven to two cents per share and adjusted earnings of one to three cents. Currently, the Street is anticipating a loss of one cent per share. WIND also guided fourth-quarter adjusted earnings to three to five cents on revenue of $60 to $62 million.

Taking yet another stab at digital download guru Apple Computer, RealNetworks (Nasdaq:RNWK) announced that it is slashing the price of its music downloads. Flying this new price war under the banner of its "Freedom of Choice" campaign, users can download any song in the company's RealPlayer Music Store for 49 cents a piece, undercutting Apple's more popular iTunes online music store price of 99 cents per song. RNWK said that the new promotion would be in effect for "a limited time." Following this new volley in the digital music war, the company also announced that it expects a third-quarter loss of three to five cents per share as a result of the new marketing campaign. Excluding antitrust litigation expenses, RNWK projects a loss of one to three cents per share, with the Street expecting a loss of three cents.

In other corporate news, Calpine (NYSE:CPN) announced that it would sell all of its Canadian natural gas reserves and petroleum assets to PrimeWest Energy Trust for about $625 million. The sale was billed as part of an effort to improve liquidity within the company. Fellow natural resources concern, Halliburton reported that the U.S. Army will begin a 15 percent withholding on invoices for its enormous military contract in Kuwait and Iraq. Halliburton officials said that the government actions are not justified, and that it is seeking legal action in the matter.

At 12:52 p.m. eastern time, the Dow Jones Industrial Average (DJIA - 9,980.3) is up 0.26 percent and the S&P 500 Index (SPX - 1082.77) is higher by 0.32 percent. The Nasdaq Composite (COMP - 1797.5) is up 0.84 percent. At 12:53 p.m. in the options pits, 1,264,633 calls and 958,954 puts traded for a composite put/call ratio across all five exchanges of 0.75. The CBOE put/call ratio for equity options weighed in at 0.85.

Research in Motion Limited (Nasdaq:RIMM) continues to see a fair amount of optimism directed its way. Despite today's heavy put activity at RIMM's August 55 strike (where nearly 4,800 contracts have crossed so far today), the equity's Schaeffer's put/call open interest ratio (SOIR) continues to persist lower. Currently, the SOIR is perched at 0.92 in the 12th percentile of its yearly range, down from its near-term high at 1.08 in the 32nd percentile on July 27. Furthermore, short sellers quickly vacated their positions over the past month, plunging short interest by 35 percent to 9.7 million shares. This measly accumulation of bearish bets now resides at a three-year low and could be covered in slightly more than one day of trading at RIMM's average daily volume. Wall Street even remains optimistic of the firm, as Zacks reports that 10 (or 71 percent) of the 14 covering analysts rate the shares a "buy" or better, with nary a "sell" rating to be found.

Technically speaking, RIMM has been a rather stellar performer over the past year, handily outpacing the broader market (as represented by the SPX) on a relative-strength basis. In recent weeks, however, RIMM has experienced a bit of a pullback, testing support at its rising 20-week moving average and threatening to post its third consecutive weekly close beneath its 10-week trendline. This dynamic duo of support has allowed only a handful of weekly closes beneath them since March 2003. The real concern for RIMM lies in the stock's nearly 20-percent decline since reaching a new multi-year high back in July. During this time period, the equity has found staunch resistance at its 10-day and 20-day moving averages. The stock has managed to rally back above these key support levels in today's session on the advent of positive analyst comments from Pacific Crest. However, with extreme levels of optimism continuing to mount toward RIMM in light of recent weakness, the risk of an additional correction in the shares is greatly increased.

Click the following link to see the Daily Chart of RIMM since June 2004 with 10-Day and 20-Day Moving Averages: http://www.schaeffersresearch.com/wire?ID=10860 .

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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 .