As evidence of investor pessimism, Johnson cites the current Schaeffer's Open Interest Ratio for AMD, now near its highest readings in the last year, which indicates that the options investors have been favoring supersedes calls.

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This is evident in the chart below, which displays the ratio of puts bought to open, relative to calls, on three major exchange-traded funds (ETFs).

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The four iShares index funds (see table below), issued by the Global Investors unit of Barclays (nyse: BCS - news - people ), sport a rock-bottom expense ratio of 0.15 versus open-end bond fund averages of around 1.00 and the 0.20 charged by low-cost leader Vanguard.

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The ratio only considers options that were bought to open, which makes the data easier to interpret by disregarding option selling.

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In the case of Cephalon, McMillan got his "buy" signal from the put-call ratio, a measure of investor sentiment expressed as put open interest divided by call open interest.

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The satellite ratio specialist is slated to release its third-quarter earnings figures ahead of the open tomorrow morning, with Wall Street looking for a profit of a penny per share.

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