The Chicago Board Options Exchange, the nation's largestoptions exchange, will begin options trading in fivebiotechnology stocks on Oct. 21. The stocks are among 21stocks being added to CBOE's list.

Options are buy or sell orders for which investors pay apremium for the right to buy or sell a stock at a fixed pricewithin a fixed period of time.

The companies being added are Gensia Pharmaceuticals Inc.,Genzyme Corp., Greenwich Pharmaceuticals Inc., ImmuneResponse Corp. and The Liposome Co.

"That's a very unusual selection of stocks," said Richard Bock,senior vice president of investments at Sutro & Co. Inc. in LosAngeles.

Bock speculated that the companies were chosen because thereis large short interest in the stocks that traders are havingtrouble covering. Bock said he was surprised that Xoma Corp.,Immunex Corp. and Genetics Institute Inc. weren't on the list.

The CBOE's stock selection committee chooses stocks foroptions trading based in part on the volatility and tradingvolume in the underlying stock, a spokeswoman said.

The Philadelphia Stock Exchange will also add 22 new stocksto its options list, including Genzyme, Synergen Inc. and Xoma.

The exchanges are adding the stocks as a result ofmodifications in Securities and Exchange Commission rulesthat broaden the pool of stocks available for options trading.

One change eliminates a requirement that companies haveearned a total of at least $1 million during the preceding eightquarters. The SEC also lowered to $7.50 a share from $10 thefloor price of stocks eligible for options trading.

The Pacific, American and New York stock exchanges also tradein options. Options trading in biotech stocks currently includesAmgen Inc., Biogen Inc., Centocor Inc., Cetus Corp., Chiron Corp.,Collagen Corp., Genentech Inc. and Molecular Biosystems Inc.

-- Karen Bernstein BioWorld Staff

(c) 1997 American Health Consultants. All rights reserved.