Schaeffer's Daily Market Blog Features MicroStrategy, Wyeth, Walt Disney, Tyco...

CINCINNATI -- Among the stocks featured in the January 31 edition of Schaeffer's Market Blog are MicroStrategy (NASDAQ:MSTR), Wyeth (NYSE:WYE), Walt Disney (NYSE:DIS), Tyco International (NYSE:TYC), and Delta Air Lines (NYSE:DAL). Schaeffer's Market Blog 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. The Market Blog is written throughout every trading day 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 Market Blog for Monday, January 31, 2005:

Below are just a few of today's Market Blog entries. Click here to read all of today's Market Blog. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

9:57 AM MicroStrategy sees Unusual Put Activity as Stock Price Jumps

MicroStrategy (NASDAQ:MSTR) surged to an all-time high on Friday after posting a blowout fourth quarter. The company announced earnings of $1.43 per share Thursday night, easily surpassing the 88 cents analysts were projecting. For more on that, see my colleague Richard Sparks' article from Friday. Despite the jump on Friday, the puts on MSTR saw eight times more volume than on the average trading day, with 6,662 contracts changing hands. The Schaeffer's put/call open interest ratio (SOIR) was unchanged at 0.73 in the 73rd percentile. The put activity was offset by the calls seeing 7.6 times more volume than usual. MSTR shares are up 3.8 percent this morning.

10:28 AM Wyeth Misses Earnings Estimates

Healthcare giant Wyeth (NYSE:WYE) announced fourth-quarter earnings results this morning, and investors were less than impressed. The company lost $1.32 per share after a one-time charge of $1.97 per share for a lawsuit reserve charge. Excluding this and other items, the earnings were 64 cents per share, which was below the consensus estimate of 67 cents per share. There was quite a bit of optimism on WYE heading into the announcement. The Schaeffer's put/call open interest ratio (SOIR) was at 0.32, which is lower than 98 percent of the readings for the past year. The short-interest ratio is 2.27, and this is after a seven-percent increase in short interest during the most recent reporting period. Analysts were somewhat cautious with 10 "buy" ratings, 10 "hold" ratings, and one "sell" rating. WYE shares are down more than seven percent this morning.

11:18 AM Options Active Ahead of Disney's Earnings

On Friday, Walt Disney (NYSE:DIS) options traded briskly, as call volume was 3.2 times heavier than average and put volume was 8.7 times heavier than average. More than 14,700 call contracts changed hands, with the most active being the March 27.50 strike (DIS CY). Investors traded more than 6,700 DIS CY contracts Friday. Nearly 10,800 put contracts crossed the tape, with the most active being the March 27.50 strike (DIS OY). Investors traded more than 6,700 DIS OY contracts Friday. A look at overall option activity on DIS shows that investors currently hold 72,700 calls compared to 28,400 puts in the front three months of activity. The resultant Schaeffer's put/call open interest ratio (SOIR) of 0.39 is lower than 97 percent of all readings taken over the past year. DIS is set to report its quarterly earnings results tonight after the market close, with analysts calling for earnings of 29 cents per share. At last check, DIS was trading 41 cents higher to $28.64 today.

11:33 AM Puts Pile for Tyco International Ahead of Earnings Report

On Friday, puts traded actively on Tyco International (NYSE:TYC), with put volume 3.5 times heavier than average. More than 8,600 contracts traded, with the most active being the February 32.50 strike (TYE NZ). Investors traded nearly 7,000 TYE NZ contracts Friday. A closer look into the activity shows that the largest trade of the day occurred at 3:34 p.m. when 4,850 contracts traded in between the bid and the ask, making it difficult to determine if the contracts were sold or purchased. A look at overall option activity on TYC shows that investors currently hold 131,000 calls compared with 54,200 puts in the near term. The resultant Schaeffer's put/call open interest ratio (SOIR) of 0.41 is lower than 58 percent of all readings taken over the past year. TYC is scheduled to release its quarterly earnings report tomorrow before the market open, with analysts calling for earnings of 42 cents per share. Today, TYC is trading a penny higher to $36.01.

12:26 PM Delta Airlines' Calls Active on Brokerage Upgrade

Shares of Delta Air Lines (NYSE:DAL) are nearly nine percent higher in midday trading after Merrill Lynch upgraded its rating on the stock. MER raised its rating to "hold" from "sell." The MER analyst said the upgrade was due primarily to DAL's valuation, saying the uncertainty of DAL's new fare structure and concerns over higher fuel prices have already been priced into the stock. Even with today's rally, DAL is down more than 26 percent for 2005. The rally has spurred call buying. DAL's March 5 call (DAL CA) has traded slightly more than 10,000 contracts. Most of this volume executed as several large block trades at 10:43 a.m. eastern time. The trades went off at the ask price at 0.85, suggesting they were purchases. With open interest of 4,564, the trades look to be the initiation of new bullish long call positions.

The above are just a few of today's Daily Market Blog entries. Click here to read all of today's Daily Market Blog. http://www.schaeffersresearch.com/redirect.aspx?CODE=PROB1C&PAGE=1

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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.