671 F.Supp. 297 (1987)
Sheldon STARKMAN, et al., Plaintiffs,
v.
WARNER COMMUNICATIONS, INC., et al., Defendants.
85 Civ. 7949 (JMW).
United States District Court, S.D. New York.
October 13, 1987.
*298 Bader & Bader, White Plains, N.Y., for plaintiffs; I. Walton Bader, New York City, of counsel.
Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for defendant Warner Communications Inc.; Leslie Gordon Fagen and C. William Phillips, of counsel.
Skadden, Arps, Slate, Meagher & Flom, New York City, for individual defendants; Barry H. Garfinkel and Jeremy A. Berman, of counsel.

MEMORANDUM AND ORDER
WALKER, District Judge:

INTRODUCTION
This case presents the question, among others, of corporate and insider liability under the anti-fraud provision of the Securities and Exchange Act to those who trade in options to buy the corporation's stock.
Plaintiffs bring this action alleging violations of Section 10(b) of the Securities and Exchange Act of 1934, as amended, 15 U.S.C. Section 78j(b), and Rule 10(b)(5) promulgated thereunder, 17 C.F.R. 240.10(b)-5, violations of the Martin Act, specifically Sections 339-a and 352-c of the General Business Law of the State of New York (McKinney 1984), and common law fraud.
Plaintiffs are Sheldon and Donna Starkman (the "Starkmans"). Defendants are Warner Communications, Inc., a Delaware corporation ("Warner"), and various directors and officers of Warner (collectively, with Warner, the "defendants").
Plaintiffs allege that they purchased 500 warrants of Warner on or about May 17, 1982 at a price of $9,562 and that they *299 suffered a loss of approximately $460,000 on Warner call options they purchased and sold between August and November 1982, due to reliance upon material misrepresentations made by defendants to the public and, in Warner filings, to the SEC concerning the financial outlook for Warner. Though not stated in the complaint, in their memorandum of law opposing defendants' requests for partial summary judgment, plaintiffs allege that even in the absence of reliance on defendants' misstatements, plaintiffs are entitled to recover their options trading losses under a "fraud on the market theory."
Defendants bring this motion for partial summary judgment on the options claims pursuant to Fed.R.Civ.P. 56, asserting that, whatever the accuracy of defendants' statements and filings, any liability of defendants does not extend to Warner option-holders, to whom they owed no fiduciary duty, that, in any event, plaintiffs did not rely on defendants' statements or omissions, and that plaintiffs, who did not trade options with any of the defendants, could not possibly be the victims of fraud. Further, defendants assert that plaintiffs may not rely on a fraud on the market theory to seek recovery.

Facts

A. The Background of the Instant Litigation

With this motion defendants seek to write the last chapter in a long story, the statements and transactions at issue having occurred over five years ago, and having already been the subject of much litigation.
In the early 1980's, Warner's profitability was greatly enhanced, in large part due to the explosive growth in the video game and cartridge industry, of which Warner's then wholly-owned subsidiary Atari, Inc. ("Atari") was an undisputed leader.
On December 8, 1982 the public learned that the good times for Warner were no longer so good. Warner announced that Atari's new sales were exceeded by cancellation of orders and that there would be a shortfall of expected profits. The Atari disappointment, together with a $20 million write-off in connection with a Warner division, Knickerbocker Toy Company, Inc. ("Knickerbocker"), led to fourth quarter 1982 earnings for Warner that were approximately 50% less than 1981 fourth quarter earnings. Warner's fiscal 1982 earnings, as a result, "would be considerably less than previously represented to the investing public." In re Warner Communications Securities Litigation, 618 F.Supp. 735, 739 (S.D.N.Y.1985). The next day Warner stock dropped 16 points amid questions at Warner over who knew what, when did they know it, and why didn't they release it to the investing public? Soon thereafter, 18 class and 4 derivative actions were filed against Warner, Atari, and various directors and officers. The class actions were consolidated into one proceeding before the District Court for the Southern District of New York and on July 18, 1983 the class plaintiffs served a consolidated amended complaint covering all of the consolidated proceedings.
On April 16, 1985, the parties in the class and derivative actions entered into a proposed settlement for both the class and derivative actions, covering the class of purchasers of Warner securities between March 3, 1982 and December 8, 1982, including those who purchased call options and sold put options which were unexpired or open to them on December 8, 1982. On August 20, 1985, Judge Keenan of this Court approved the settlement proposal. The proposed class action settlement provided that the defendants would pay approximately $17 million plus accrued simple interest in settlement of all class action claims against them. The derivative claims were settled by the individual defendants for $2 million to be paid to Warner.
The Starkmans, after having first filed an objection to the proposed class settlement, opted out of the class and shortly thereafter began the instant litigation.

B. The Starkman Transactions

Plaintiffs bring their action as a result of losses sustained in the options market, a market whose most significant characteristic *300 is great risk. The Options Clearing Corporation (the "OCC"), the creator of the options in which plaintiffs speculated, defines an option as "a legal contract that gives the holder the right to by [a "call"] or sell [a "put"] a specified amount of the underlying interest at a fixed or determinable price ... upon exercise of the option."[1]
Plaintiffs speculated in "call" options, a contract giving the holder the right to purchase a specified amount of the underlying security at a specified price during the term of the option. A sale of a call option obligates the seller to deliver the underlying security to the OCC prior to expiration of the option if the option is exercised.
There is a great deal of risk associated with either the purchase or sale of call options. If one sells a call option and the price of the underlying security rises above the option price, the purchaser of the option will certainly "call" the stock and obtain it from the seller of the option at the "strike" price rather than at the higher market price. The seller of the option, if he owns the underlying security, will "lose" the profit foregone from his inability to sell the security for himself at the higher price. This foregone profit is, of course, offset in whole or in part by the amount of any premium received from the purchaser of the call option for bearing the risk. One who sells calls but does not own the underlying security ("naked calls") takes an even greater risk. Upon its exercise, the seller of the naked call must go out into the market to purchase the underlying security in order to resell it to the purchaser of the call.
Plaintiffs have been holders of Warner common stock since 1974. In 1982 plaintiffs were owners of 27,374 shares of Warner, and maintained significant investments in the securities markets, totalling nearly $2 million, inclusive of margin owed the broker. Plaintiffs had first traded options in 1980, sustaining a loss of about $10,000 on options written on stock of 20th Century-Fox. In January 1982, plaintiffs began to trade in Warner options by selling puts  trades not at issue in this lawsuit. Plaintiff Sheldon Starkman's investment strategy originated with his brother and stockbroker Michael Starkman. It was a strategy Sheldon Starkman admitted at deposition that he "did not entirely understand."[2]
By August 1982, Warner common stock had tumbled from a February 1982 high of 60 to a range in the mid-to-high 30s. Industry analysts had become "bearish" on Warner, and Sheldon Starkman, in part "because of such comments ... thought it a good idea to hedge [his] position in the stock against further loss by selling call options...."[3] By mid-September however, Warner stock had begun to rise again. Nevertheless, Sheldon Starkman continued to bet on a price decline by selling call options. Sheldon Starkman "could not entirely believe the continuing good sales releases from Atari and Warner ... especially in view of Mr. Harold Vogel's [of Merrill Lynch] still bearish position."[4] Warner stock continued to rise, however, and plaintiffs "continued almost in disbelief to sell options, even naked calls beyond [their] holdings."[5] Plaintiffs had not only sold calls during this period. They had also bought calls and profitted handsomely, earning over $120,000.[6]
Plaintiffs' frenetic trading continued throughout the fall and, by October, with Warner stock maintaining its upward movement, plaintiffs were writing call options nearly every day of the month. In late October plaintiffs began repurchasing calls to "bite the bullet," to try to cover August and September losses and to "jump *301 into a higher price that [plaintiffs] didn't think it would reach."[7] By mid-November plaintiffs had lost $460,000.[8] It is this loss which plaintiffs seek to recover.

Discussion

A. Standard for Summary Judgment

The Federal Rules authorize summary judgment where "there is no genuine issue as to any material fact...." Fed.R.Civ.P. 56(c). "[S]ummary judgment will not lie if the dispute about a material fact is `genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). "The burden, therefore, is on the moving party to establish that no relevant facts are in dispute." Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444 (2d Cir.1980).

B. Liability Under Section 10(b) and Rule 10b-5

Rule 10b-5 promulgated under Section 10(b) of the Securities and Exchange Act of 1934, as amended, 15 U.S.C. Section 78j, makes it unlawful for any person
(a) to employ any device, scheme, or artifice to defraud,
(b) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading, or
(c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.
17 C.F.R. 240.10b-5.
In order to establish a claim for relief under these provisions, claimants must establish that (1) the instrumentalities of commerce were used, 15 U.S.C. Section 78j; (2) claimants sold or purchased securities, Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975); (3) defendants, acting with scienter, employed a scheme or artifice to defraud, made material misrepresentations or omissions of fact, or engaged in an act, practice or course of business that operated as a fraud, Ernst & Ernst v. Hochfelder, 425 U.S. 185, 197, 96 S.Ct. 1375, 1382, 47 L.Ed.2d 668 (1976); (4) the proscribed conduct occurred in connection with the purchase or sale of securities, Superintendent of Insurance of State of New York v. Bankers Life & Casualty Co., 404 U.S. 6, 10, 92 S.Ct. 165, 167, 30 L.Ed.2d 128 (1971); Chemical Bank v. Arthur Andersen & Co., 726 F.2d 930 (2d Cir.), cert. denied, 469 U.S. 884, 105 S.Ct. 253, 83 L.Ed.2d 190 (1984); and (5) defendants' conduct caused injury to the claimants. Bloor v. Carro, Spanbock, Londin, Rodman, & Fass, 754 F.2d 57, 61 (2d Cir.1985).

(1) Whether Plaintiffs' Are Owed A Duty By Defendants

This motion raises the question whether corporate insiders who fail to disclose material inside information and who sell shares in the corporation may be held liable under the anti-fraud provisions of the federal securities laws to persons who trade in options to purchase the corporation's securities. This question, while not entirely new to the courts, is one in which the law is unsettled. See Laventhall v. General Dynamics Corporation, 704 F.2d 407 (8th Cir.), cert. denied, 464 U.S. 846, 104 S.Ct. 150, 78 L.Ed.2d 140 (insiders trading in corporation stock owed no duty to disclose or abstain to purchaser of call options and, therefore, purchaser had no standing to allege violations of the Securities and Exchange Act); Deutschman v. Beneficial Corporation, 668 F.Supp. 358 (D.Del.1987) (purchaser of call options lacked standing to assert claim of misrepresentations and omissions by corporation where no insider traded in options or in corporation stock); Bianco v. Texas Instruments, 627 F.Supp. 154 (N.D.Ill.1985) (Purchasers and sellers of call options held to lack standing to allege securities fraud against corporation and its insiders for affirmative misrepresentations *302 and for insider trading where option traders neither purchased nor sold corporation stock); In re McDonnell Douglas Corporation Securities Litigation, 567 F.Supp. 126 (E.D.Mo.1983) (purchasers of call options denied standing to sue corporate insiders with respect to claims based on nondisclosure of inside information and insider trading.) See also In re Digital Equip. Corp. Securities Litigation, 601 F.Supp. 311 (D.Mass.1984) (granting option-holders standing to sue for affirmative misrepresentations of corporation); Backman v. Polaroid Corp., 540 F.Supp. 667 (D.Mass.1982) (because options are securities within meaning of Section 10(b) and because Section 10(b) applies to `any person', purchaser of call options had standing to sue for insider trading of stock); O'Connor & Associates v. Dean Witter Reynolds, Inc., 529 F.Supp. 1179 (S.D.N.Y.1981) (optionholders have standing to sue corporate insiders and their tippees who themselves traded in options based on inside information); Lloyd v. Industrial Bio-Test Laboratories, Inc., 454 F.Supp. 807 (S.D.N. Y.1978) (purchaser of call options had standing to sue corporation for affirmative misrepresentations).
The ultimate question raises a number of subsidiary ones. May a corporation and its insiders be held liable to an options trader where neither the corporation nor the insiders have issued or traded in options and where neither have had any relationship with the options trader except insofar as the corporation's activities influence economic decisions in the marketplace generally? Does the corporation owe a duty to the market generally, so that those who own no part of a corporation but who nonetheless speculate on the corporation's future may hold the corporation liable for withholding from the market material information which would alter the speculator's analysis of the corporation's future? Because the value of an option is directly related to the value of the underlying security on which the option is written, ought we deem the option trader "close enough" to the corporation so that he may invoke the same protections as the common shareholder?
The purpose behind Section 10(b) and Rule 10b-5 "is to protect the investing public and to secure fair dealing in the securities markets by promoting full disclosure of inside information so that an informed judgment can be made by all investors who trade in such markets." Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 495 F.2d 228, 235 (2d Cir.1974); Crane Co. v. Westinghouse Air Brake Co., 419 F.2d 787, 793 (2d Cir.1969), cert. denied, 400 U.S. 822, 91 S.Ct. 41, 27 L.Ed.2d 50 (1970). Nevertheless, although Section 10(b) "must be read flexibly, not technically and restrictively," Superintendent of Insurance of State of New York, 404 U.S. at 12, 92 S.Ct. at 169, Rule 10b-5 was not intended "to establish a scheme of investor's insurance." List v. Fashion Park, Inc., 340 F.2d 457, 463 (2d Cir.), cert. denied, 382 U.S. 811, 86 S.Ct. 23, 15 L.Ed.2d 60 (1965).
For plaintiffs to recover as the victims of fraud, as a threshhold matter, they must show that some duty was owed them and that that duty was breached. Liability must be grounded on "a duty to disclose arising from a relationship of trust and confidence between parties to a transaction." Chiarella v. United States, 445 U.S. 222, 230, 100 S.Ct. 1108, 1115, 63 L.Ed.2d 348 (1980); see also Dirks v. S.E.C., 463 U.S. 646, 657-58, 103 S.Ct. 3255, 3263, 77 L.Ed.2d 911 (1983) ("We reaffirm today that `a duty to disclose arises from the relationship between the parties.'") (quoting Chiarella, 445 U.S. at 231, n. 14, 100 S.Ct. at 1116, n. 14).
In Chiarella, the Supreme Court reversed the conviction of a financial printer who had deduced the identities of potential takeover targets from financial documents he had access to in the course of his printing activities and then purchased the targets' securities, realizing a substantial gain. 445 U.S. at 224, 100 S.Ct. at 1112. The Court rejected a "parity of information" rule: that "the use by anyone of material information not generally available is fraudulent ... because such information gives certain buyers or sellers an unfair advantage over less informed buyers *303 and sellers." Id. at 232, 100 S.Ct. at 1116.
The Court reasoned that "no duty could arise from petitioner's relationship with the sellers of the target company's securities, for petitioner had no prior dealings with them. He was not their agent, he was not a fiduciary, he was not a person in whom the sellers had placed their trust and confidence. He was, in fact, a complete stranger who dealt with the sellers only through impersonal market transactions." Id. at 232-233, 100 S.Ct. at 1116-17. The Court reiterated the established doctrine that "duty arises from a specific relationship between two parties." Id. at 233, 100 S.Ct. at 1117.
The reasoning in Chiarella relied in part on an earlier SEC decision and the common law which recognized the dependency of "duty" on "relationship" when imposing disclosure obligations. In Cady, Roberts & Co., 40 S.E.C. 907 (1961), "the Commission decided that a corporate insider must abstain from trading in the shares of his corporation unless he has first disclosed all material inside information known to him." Chiarella, 445 U.S. at 227, 100 S.Ct. at 1114. The SEC there looked to "a relationship of trust and confidence" between insiders and the shareholders of a corporation. Id. at 228, 100 S.Ct. at 1114. That relationship gave rise to a disclosure obligation because of the "necessity of preventing a corporate insider from taking unfair advantage of the uninformed minority stockholders." Id. at 228-229, 100 S.Ct. at 1115, quoting Speed v. Transamerica Corp., 99 F.Supp. 808, 829 (D.Del.1951).
The Chiarella court further noted that at common law "one who fails to disclose material information prior to the consummation of a transaction commits fraud only when he is under a duty to do so. And the duty to disclose arises when one party has information `that the other party is entitled to know because of a fiduciary or other similar relation of trust and confidence between them.'" Chiarella, 445 U.S. at 228, 100 S.Ct. at 1114, quoting Restatement (Second) of Torts § 551(2)(a) (1976).
In Laventhall, the Eighth Circuit Court of Appeals applied the reasoning in Chiarella to deal squarely with the issue presented in this case. Laventhall affirmed a lower court dismissal for lack of standing of a suit by a purchaser of calls against a corporation trading solely in its common stock. Laventhall alleged that General Dynamics, without disclosing a pending declaration of cash dividend, purchased 157,500 shares of its common stock in December 1978. On January 4, 1979, the corporation declared a dividend and a stock split. Laventhall brought suit against the corporation for trading its stock on the basis of undisclosed material inside information.
Employing the analysis developed by the Supreme Court in Chiarella, the court in Laventhall pointed out that the relationship between an optionholder and the issuer of the underlying security is fundamentally different from the relationship between a shareholder and the issuer. The court focused on Chiarella's holding that "liability is premised upon a duty to disclose arising from a relationship of trust and confidence between parties to a transaction." Laventhall. 704 F.2d at 412, quoting Chiarella, 445 U.S. at 230, 100 S.Ct. at 1115. The Laventhall court noted that an issuer trading in its own stock and an optionholder are not parties to a transaction. The optionholder, before, during, and after his purchase or sale of options is still a complete stranger to the corporation "and ordinarily no duty would be owed." Laventhall, 704 F.2d at 412.
The court stated that the "sine qua non in every private action under section 10(b) is unauthorized trading of securities in the same market as the persons damaged." Id. Thus, a private plaintiff must "show some transactional nexus between defendant's trading and plaintiff's loss." Id. The court explained that the
legal justification for liability of the corporate insider to the outside uninformed investor is that if the insider trades on the basis of the inside information it may profit at the expense of outside investors who are disadvantaged in the same or *304 similar transaction by lack of the inside information.... However, the same analysis cannot be applied to a transaction between an options holder dealing with a third party and the corporate insider or his tippee dealing with shares of stock. There is only a speculative relationship between the insider's trading and the alleged loss caused to the options holder ... the nondisclosure may have had some indirect effect on the option premium, but the insider's trading of stock on the stock market has no transactional nexus with the option holder's loss on the options exchange.
Id. We agree with the Laventhall court's reasoning and result. As in Laventhall, defendants here engaged in no transaction with plaintiffs and never were about to do so. After plaintiffs' purchases of call options "they were still complete strangers to [Warner], and ordinarily no duty would be owed." Id.
While face-to-face transactions are not required to give rise to liability, Baretge v. Barnett, 553 F.2d 290, 291 (2d Cir.1977), Shapiro, 495 F.2d at 228, 239 ("privity between plaintiffs and defendants is not a requisite element of a Rule 10b-5 cause of action for damages"), we agree with the Laventhall court that some "transactional nexus between defendant's trading and plaintiff's loss" need be shown. Laventhall, 704 F.2d at 412.
Here, none has been shown. There exists only the speculative relationship between the insiders' trading and the alleged loss caused to the options holder which Laventhall found inadequate. Plaintiffs here sold many and purchased some call options on Warner common stock between August and November 1982. These options were issued by the OCC, not Warner. Indeed, as the OCC explains, "as a rule, issuers of underlying stocks do not participate in the selection of their stocks for options trading."[9] Neither does Warner control the number or variety of options issued. "Issuers of underlying stocks have no responsibility regarding the issuance, the terms, or the performance of the options ... and option holders have no rights as security holders of such issuers."[10] For performance of the contractual obligation, an option buyer "looks to OCC (in the sense that he relies on a backup system established by OCC) rather than to any particular buyer ... the aggregate rights of option holders are matched by the aggregate obligations that option writers owe to OCC."[11] Warner then, is not a participant in the process of issuing, selling, purchasing or matching options.
Simply because the terms of an option and its exercise may be keyed to the value of an equity does not make it a derivative of an equity. The instrument stands alone, claiming no equity in the corporation, entitled to no vote, and with no fiduciary obligation of the management to the optionholder's interest.
In O'Connor & Associates v. Dean Witter Reynolds, Inc. (O'Connor I), 529 F.Supp. 1179, 1184-85 (S.D.N.Y.1981) (Lasker, J.), the Court, while granting an optionholder standing to allege fraud against insiders who traded options contemporaneously with the optionholder, stated that
the relationship between corporate insiders and shareholders stands in stark contrast to the lack of relationship between the corporate insiders and options traders ... the dispositive distinction is that the options trader has no equity interest in the corporation by virtue of his selling or purchasing an option on the corporation's stock ... the optionholder is owed no special duty by the officers and directors of the corporation because, quite simply, the corporation is not run for his benefit ... In short, as a shareholder one is entitled to the benefits of a trust relationship. As an options trader, one is not.
Optionholders should not, and presumably do not, expect that management owes *305 them obligations of disclosure similar to those owed to shareholders. Optionholders, who may ultimately reap the rewards of the corporation's successful operation, do not bear the same costs as ordinary shareholders do. These costs include outlays to provide incentives to management to enhance performance and reduce self-dealing. Shareholders, and not optionholders, pay for the right to replace management or effect a change in control.
This Court does not base its decision solely on the ground that plaintiffs were not shareholders at the time of the misstatements and/or omissions complained of. Nor, of course, does this Court suggest that optionholders who exercise their options and then purchase or sell the underlying security are in any way precluded from recovery for fraud. The Court is mindful that Cady, Roberts extended the insider's duty to disclose or abstain to incipient as well as preexisting shareholders. It is quite true, as Learned Hand wrote, that a director and officer does assume "a fiduciary relation to the buyer by the very sale; for it would be a sorry distinction to allow him to use the advantage of his position to induce the buyer into the position of a beneficiary although he was forbidden to do so once the buyer had become one." Cady, Roberts, 40 S.E.C. at 914, n. 23, quoting Gratz v. Claughton, 187 F.2d 46, 49 (2d Cir.), cert. denied, 341 U.S. 920, 71 S.Ct. 741, 95 L.Ed. 1353 (1951).
In O'Connor I, this Court did allow a seller of call options to maintain allegations of insider trading against insiders and their tippees who bought call options contemporaneously. While, as noted above, the Court distinguished the duty of trust and confidence owed by corporate insiders to shareholders from the absence of any such duty to optionholders, it read United States v. Newman, 664 F.2d 12 (2d Cir. 1981), aff'd after remand 722 F.2d 729 (2d Cir.1983) (unpublished order), cert. denied, 464 U.S. 863, 104 S.Ct. 193, 78 L.Ed.2d 170 (1983), a criminal action, to mean that in a civil case, where corporate insiders breach fiduciary duties to some parties, other parties may recover since "the alleged practice constitutes a fraudulent practice within the meaning of the securities law." O'Connor I, 529 F.Supp. at 1185. Thus, Judge Lasker reasoned, the misappropriation by an employee of an employer's information might give rise to liability to injured third parties based on the breach of fiduciary duty to the employer but not to them.
O'Connor I is distinguishable from the case at bar in several respects. First, in O'Connor I, the court, in granting standing to plaintiffs, relied heavily upon the fact that defendants contemporaneously traded the same option instruments and profitted thereby. Here, plaintiffs do not allege that defendants traded in Warner options at any time. See also Bianco, 627 F.Supp. at 154. Further, in Moss v. Morgan Stanley, Inc., 719 F.2d 5 (2d Cir.1983), cert. denied, 465 U.S. 1025, 104 S.Ct. 1280, 79 L.Ed.2d 684 (1984), the Court of Appeals affirmed the dismissal by Judge Pollack of this Court of an action for damages by a shareholder of a target corporation who sold his stock unknowingly prior to the public announcement of a tender offer, to a tippee whose knowledge of the takeover was due to the misappropriation of non-public information by an employee of the tender offeror's investment banker. The Court of Appeals stated that "nothing ... in Newman suggests that an employee's duty to `abstain or disclose' with respect to his employer should be stretched to encompass an employee's `duty of disclosure' to the general public." 719 F.2d at 13. The court then approved the district court's conclusion that "plaintiff cannot hope to piggyback upon the duty owed by defendants [investment banker's employee and his tippees] to the employer [investment banker] of one defendant and the employer's client. There is no `duty in the air' to which any plaintiff can attach his claim." Id., quoting Moss v. Morgan Stanley, Inc., 553 F.Supp. 1347, 1353 (S.D.N.Y.1983).
It is true, as Judge Lasker subsequently noted in O'Connor & Associates v. Dean Witter Reynolds, Inc. (O'Connor II), 600 F.Supp. 702 (S.D.N.Y.1985), that the Moss defendants who traded non-public information were not "traditional" insiders. But nothing in Moss indicates that had the defendants *306 in that case been traditional insiders, they would have owed duties, beyond those owed to the shareholders, to the public at large, including optionholders who were betting on price changes in the company's stock and with whom the insiders had no dealings. Indeed, as the footnote to Moss, quoted in O'Connor II, states, "[o]rdinarily, `insiders' ... owe a duty to a corporation's shareholders ..." Id., quoting Moss, 719 F.2d at 10-11, n. 8.
The O'Connor II court, while acknowledging that the insiders there owed no fiduciary duty to the optionholders, relied upon Shapiro v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 495 F.2d 228 (2d Cir.1974) concluding that "by virtue of their fiduciary duty to the corporation and its shareholders, corporate insiders become subject to the separate duty to either `abstain or disclose' ... this additional duty is owed `to the investing public.' Shapiro [full citation omitted.]"
But Shapiro, we think, should not be read to hold that insiders owe a duty to the entire investing public so that someone trading in a security different from that traded by the insiders who arguably suffers a loss due to an insider's misrepresentation or omission may hold the insider liable. The discussion in Shapiro from which the quote on duty to the investing public is drawn does not concern the nature of the relationship upon which liability may rest but rather centers on the question of whether privity is required to prove causation-in-fact. Recognizing that national markets are the scene of a multitude of trades daily and that a plaintiff will likely be unable to prove he purchased or sold to a defendant, the court held that proof of causation will not depend "upon the character of the transaction  face-to-face versus national securities exchange ..." Shapiro, 495 F.2d at 240. The Shapiro court did not approve the proposition that an insider who trades in the issuer's securities might be liable to a person who does not.
It should also be noted that this Court, before Chiarella, did grant a purchaser of call options standing to maintain allegations that fraudulent misrepresentations by a corporation and its subsidiary served to artificially inflate the price of the stock. Lloyd v. Industrial Bio-test Laboratories, Inc., 454 F.Supp. 807 (S.D.N.Y.1978). The Court based its decision upon the fact that an option is a security within the meaning of Section 10(b) and Rule 10b-5 and that the Section and the Rule apply to "any person" engaging in certain deceptive or fraudulent activities. For purposes of withstanding a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), plaintiff, by alleging that defendants engaged in those activities, had standing to sue. See also Backman, 540 F.Supp. at 671; In re Digital Equipment Corp. Securities Litigation, 601 F.Supp. at 311.
Lloyd was decided before Chiarella, however, and did not analyze defendants' duty to plaintiff in terms of Chiarella's discussion of relationships of trust and confidence and obligations to disclose. Moreover, while the Court in Lloyd is correct that options are securities, 15 U.S.C. § 78c(a)(10), and that Section 10(b) and Rule 10b-5 apply to "any person", both the Section and the Rule prohibit fraudulent acts only "in connection with the purchase or sale of any security." 15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5. The Warner options are securities but they are not securities of Warner. It is not alleged that defendants traded in these securities nor is it alleged that any manipulative or deceptive acts were directed at the options market. "Plaintiff's trading in option contracts is simply too remote to satisfy the `in connection with' requirement when the alleged deceptive acts are merely corporate misstatements and nondisclosures not directed in any way to the options market." Deutschman, 668 F.Supp. 358; quoting Bianco, 627 F.Supp. at 161.
This Court recognizes the need for a securities market the integrity and fairness of which potential investors will be convinced and that historically the courts have taken a leading role in protecting participants in the market from misleading and deceptive practices. It is also clear that the price of an option depends in large measure on the price of the underlying security and that misleading information *307 affecting the price of the stock will normally affect the price of the option. Nevertheless, options trading is recognized as inherently more risky than investing in shares and an investor chooses which risk/return strategy to follow. Further, the cost of a great expansion of liability to optionholders and concomitant larger judgments against corporations will ultimately be borne by the shareholders of public corporations, "usually the most important segment of the total category of investors intended to be protected." Cohen, Truth in Securities Revisited, 79 Harv.L.Rev. 1340, 1370 (1967); See S.E.C. v. Texas Gulf Sulpher Co., 401 F.2d 833, 867 (2d Cir.1968) (Friendly, J. concurring), cert. denied, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756 (1969). Indeed, as "Chief Judge Cardozo observed, caution is the watchword where the creation of a duty results in `a liability in an indeterminate amount for an indeterminate time to an indeterminate class.'" Deutschman, 668 F.Supp. 358, quoting Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441 (1931).
As the Bianco court stated, "we do not feel obligated to expand the scope of liability under Section 10(b) to make this obviously uncertain market safer for the trader who has no connection whatsoever to the issuer of the underlying stock." Bianco, 627 F.Supp. at 161. As noted above, Warner had no connection whatsoever with the issuance, purchase, sale, or matching of the options. Warner did not control the number or variety of options issued. Warner's "potential liability to options holders is limited only by the whims of the options writers." Id. Under Chiarella we do not find the required relationship between defendants and plaintiffs close enough to impose liability. Thus the Court grants defendants' motion for partial summary judgment pursuant to Fed.R.Civ.P. 56.

(2) Fraud on the Market

Although plaintiffs do not allege any "fraud on the market" theory in their complaint, they do allege it in their reply to defendants' motion for summary judgment.[12] Plaintiffs, however, misunderstand the nature of the theory and what purpose it is intended to serve.
Plaintiffs assert that "even if the plaintiff did not rely on the false statements made by Warner, or even if he did not believe them, the making of false statements by Warner and failing to disclose pertinent information is a `fraud on the market' and actionable even in the absence of reliance or action taken with respect thereto."[13]
Indeed, plaintiffs all but admit that they did not rely on either the alleged material misrepresentations or the market price. At oral argument, plaintiffs' attorney stated that "Warner then comes out and submits an optimistic statement which the market believes. Because the market believes it, the market goes up and obviously, even though Mr. Starkman was right in his determination, the false reports given by Warner improperly inflated the market and, under those circumstances, Mr. Starkman was hurt." (emphasis added).[14]
Plaintiff's assertions regarding the fraud on the market theory are simply incorrect. That theory does not dispense with a reliance requirement but rather permits a more flexible construction of it. See, e.g., Zuckerman v. Harnischfeger Corp., 591 F.Supp. 112, 122 (S.D.N.Y.1984); Shores v. Sklar, 647 F.2d 462 (5th Cir.1981) (en banc), cert. denied, 459 U.S. 1102, 103 S.Ct. 722, 74 L.Ed.2d 949 (1983); Blackie v. Barrack, 524 F.2d 891 (9th Cir.1975), cert. denied, 429 U.S. 816, 97 S.Ct. 57, 50 L.Ed.2d 75 (1976). The theory affords a plaintiff a presumption of reliance which the defendant may rebut. In essence, the theory accepts that misrepresentations may inflate the price of a stock and that a potential investor may detrimentally rely on the integrity of the market price. In Panzirer v. Wolf, 663 F.2d 365 (2d Cir. 1981), vacated as moot, 459 U.S. 1027, 103 S.Ct. 434, 74 L.Ed.2d 594 (1982), for example, *308 the Court of Appeals held that a plaintiff who relied on the integrity of the market, where the market price was distorted through the filing of a materially misleading annual report, "stated a sufficient claim of reliance on the misrepresentation or omission." 663 F.2d at 367. The court recognized that some reliance was still required, stating that the "function of requiring the plaintiff to show reliance in a 10b-5 action is to permit only those injured by fraud to sue." Id. See also Blackie v. Barrack, 524 F.2d 891 (9th Cir.1975), cert. denied, 429 U.S. 816, 97 S.Ct. 57, 50 L.Ed.2d 75 (1975).

C. The Martin Act Claims

Plaintiffs also assert claims under Sections 339-a and 352-c of the General Business Law of New York (the "Martin Act"). In CPC International v. McKesson Corporation, 70 N.Y.2d 268, 519 N.Y.S.2d 804, 514 N.E.2d 116 (N.Y.1987) the New York Court of Appeals held that no implied private right of action exists under Section 352-c. While the court did not expressly state that no private right of action exists under any part of the Martin Act, it did state that "an implied private action is not consistent with the legislative scheme underlying the Martin Act and, specifically Section 352-c...."
Even if Section 339-a were held to permit a private right of action, plaintiffs would not benefit. As stated previously, plaintiffs do not allege they purchased call options from defendant or that defendants traded in options at all. The Martin Act "cannot be reasonably extended to cover a purchaser who does not make his purchase from the misrepresenter...." Kaufman v. Chase Manhattan Bank, N.A., 581 F.Supp. 350, 355 (S.D.N.Y.1984), quoting Herdegen v. Paine, Webber, Jackson, & Curtis, 31 Misc.2d 104, 220 N.Y.S.2d 459 (N.Y.Sup.1961) (dismissing the claim where plaintiff neither bought nor sold securities from defendants as a result of the misrepresentations, nor were the misrepresentations designed to induce such a purchase or sale); but see Whitbread (US) Holdings, Inc. v. Baron Philippe de Rothschild, 630 F.Supp. 972 (S.D.N.Y.1986).
Consequently, plaintiffs' Martin Act claims are dismissed.

D. The Common Law Fraud Claims

Plaintiffs also allege that they have been the victims of common law fraud.[15] An action for common law fraud in New York requires proof by clear and convincing evidence of: (1) a misrepresentation or omission of material fact; (2) intent to deceive (scienter); (3) reliance by the plaintiffs; and (4) injury to the plaintiffs caused by plaintiffs' reliance on the misrepresentation or omission. Mallis v. Bankers Trust Co., 615 F.2d 68, 80 (2d Cir.1980), cert. denied, 449 U.S. 1123, 101 S.Ct. 938, 67 L.Ed.2d 109 (1981); Idrees v. American University of the Caribbean, 546 F.Supp. 1342, 1346 (S.D.N.Y.1982).
Defendants' duty to plaintiffs is no greater under common law than under Rule 10b-5. Thus, for the reasons stated in the discussion of liability under Section 10(b) and Rule 10b-5, plaintiffs' common law fraud claim for options trading losses is dismissed.

Conclusion
Defendants are hereby granted partial summary judgment on plaintiffs' options trading claims pursuant to Fed.R.Civ.P. 56.
SO ORDERED.
NOTES
[1]  Options Clearing Corporation, Characteristics and Risks of Standardized Options, (1985) at 4 (Exhibit D to the affidavit of Leslie Gordon Fagen).
[2]  Starkman deposition at 100 (Exhibit C to Fagen Aff.).
[3]  Handwritten statement of Sheldon Starkman (Exhibit 27 to Exhibit D of Fagen aff.).
[4]  Id.
[5]  Id.
[6]  Exhibit 17 to Exhibit D of Fagen aff.
[7]  By mid-November plaintiffs had lost $460,000.
[8]  Complaint, Count 4.
[9]  Characteristics and Risks of Standardized Options, at 61.
[10]  Id.
[11]  Id. at 60.
[12]  Defendant's Reply Memo at 7.
[13]  Id.
[14]  Oral argument transcript at 16.
[15]  Complaint, Count 4.


70 Wyo. 193 (1952)
246 P.2d 767
WALGREEN CO., a Corporation, Plaintiff and Appellant,
vs.
THE STATE BOARD OF EQUALIZATION OF THE STATE OF WYOMING, Defendant and Respondent.
No. 2535
Supreme Court of Wyoming
July 29, 1952
For the plaintiff and appellant the cause was submitted upon the brief of Ellery & McClintock, of Cheyenne, Wyoming.
For the defendant and respondent the cause was submitted upon the brief of Harry S. Harnsberger, Attorney General, Howard B. Black, Deputy Attorney General, Paul T. Liamos, Jr., Assistant Attorney General, all of Cheyenne, Wyoming.

*194 OPINION
ILSLEY, Justice.
The plaintiff and appellant seeks to recover in this action, by its amended petition and the amendments *197 made on trial, the sum of $3,059.18 from the defendant and respondent because of an overpayment made to defendant by virtue of the Wyoming Sales Tax Law.
A summary of the allegations of the plaintiff's petition and the admissions in the answer of the defendant sufficient to set forth the point at issue and to be decided follows:
Briefly stated, plaintiff alleged that in the operation of several of its retail drug stores in Wyoming, between August 1, 1942 and September 30, 1945, it made many sales where the amount involved was twenty-five cents (25c) and more upon which it collected a 2% sales tax as provided in Article 25, Chapter 32, W.C.S. 1945. That plaintiff, between the dates above mentioned, also made many retail sales to purchasers where the sales price amounted to twenty-four cents (24c) or less and upon such sales the Wyoming Sales Tax Statute imposes a tax of 1%. That upon an audit by defendant of the books of the plaintiff the defendant determined that the total taxable sales during such period amounted to $1,177,662.52, and upon which a tax of 2% was assessed by defendant amounting to $23,553.25, to which was added certain use taxes assessed against plaintiff in the sum of $205.59, making in all a total claim against plaintiff of $23,758.54. That plaintiff had theretofore paid defendant $19,568.95. That defendant issued a notice of assessment for the difference, amounting to the sum of $4,189.59. That the bulk of plaintiff's records were kept in Chicago and Denver. That plaintiff, in accordance with the law and the regulations thereunder, signified to defendant its election to report upon the basis of detailed segregated records. That on the 26th of September, 1947, plaintiff filed its protest against the payment of a portion of the amount demanded, viz., $3,203.15 (later reduced by plaintiff's waiver to $3,059.18), which protest was marked Exhibit *198 "A," attached to the amended petition and to all intent and purposes is the same as the allegations in the petition. All of the foregoing matters were admitted by defendant in its answer.
The following allegations in plaintiff's amended petition were denied by the answer of the defendant: That sales in Wyoming in the sum of $876,091.90 represented sales amounting to twenty-five cents (25c) and more, while the sum of $294,372.36 represented sales amounting to twenty-four cents (24c) and under; that although plaintiff offered to make available to defendant its detailed segregated records for its examination the defendant refused so to do and issued a notice of assessment upon a flat 2% tax upon the total sales, irrespective to that portion of the total sales representing a price of twenty-four cents (24c) and under, which assessment was computed on the basis of a flat 2% of plaintiff's gross sales. Plaintiff alleges that by reason of the foregoing, the assessment made is wholly null and void. That the assessment is null and void insofar as defendant attempts to impose a sales tax upon sales of twenty-four cents (24c) and under in that the same is unconstitutional and void in contravention of section 1 of the 14th amendment to the Constitution of the United States, because the classification of such sales tax is not predicated upon any substantial difference in situation an dcircumstance, but is such an arbitrary, discriminatory, unreasonable classification as to result in a denial of the equal protection of the laws. That such levy and assessment is also in contravention of sections 2 and 34, Article I, section 27 of Article III and section 28 of Article I of the Constitution of the State of Wyoming, wherein it is provided:

Section 2, Article I:
"In their inherent right to life, liberty and the pursuit *199 of happiness, all members of the human race are equal."

Section 34, Article I:
"All laws of a general nature shall have a uniform operation."

Section 27, Article III:
"The legislature shall not pass local or special laws in any of the following enumerated cases, that is to say: * * * granting to any corporation, association or individual, the right to lay down railroad tracks, or any special or exclusive privilege, immunity or franchise whatever, * * * for the assessment or collection of taxes; * * *"

Section 28, Article I:
"No tax shall be imposed without the consent of the people or their authorized representatives. All taxation shall be equal and uniform."
Therefore plaintiff makes claim and prayer for judgment in the sum of $3,059.18 and interest. Issue was joined upon the admissions and a general denial in the answer of the defendant.
The case coming on for trial counsel for plaintiff submitted its case upon the "admissions in the pleadings as supplemented by the stipulation this day filed." The stipulation having to do with the admissions above referred to by defendant by way of its answer. With that, plaintiff rested its case. Mr. Harnsberger, the Attorney General, then made the following motion:
"The plaintiff having rested his case without introduction of any testimony or evidence in support of allegations of its petition and upon any of the issues joined by the answer of the defendant and matters stipulated to between the respective counsel, defendant moves the Court for its order rendering judgment in favor of the defendant and against the plaintiff; that the plaintiff take nothing by its action herein, and that the defendant do have a recovery of and from the plaintiff of its costs herein expended."
*200 After argument upon the motion the following colloquy took place between court and counsel:
"The Court: Now, you allege, as I understand it  you allege that they have kept a detailed segregated record. You allege that somewhere.
"Mr. McClintock: Yes, we do, Your Honor.
"The Court: Somewhere in your petition. And you contend that the State in its answer has admitted
"Mr. Harnsberger: No, we haven't.
"Mr. McClintock: We do contend that we collected all the tax that was due of the 2% sales and having paid it to the State that thereby there is a segregation. That proves that  that proves segregation of 2% tax definitely.
"The Court: Well, it proves that you have at least paid the maximum tax that you could be expected to pay under any factual contention.
"Mr. McClintock: That's right.
"The Court: Now, do you contend that having paid that that it included the smaller 1% tax.
"Mr. McClintock: No, Your Honor, we don't do that. We admit that if this tax is constitutional then we are not entitled to recover. That is the only claim we are attempting to make is that the 1% tax is unconstitutional and that if it is unconstitutional then we have satisfied the burden of proof resting on us of showing that we have paid a tax which is illegally assessed because if the 1% tax is unconstitutional then there is no justification whatsoever for them assessing an additional tax because they have admitted that we have collected part of the 2% tax that was collectible."
It appearing to the trial court that plaintiff paid 2% on part of its sales; that part represented by sales of twenty-four cents (24c) and under, so as to come under to prove, after having been given the opportunity by the trial court, that it had segregated its sales of twenty-four cents (24c) and under, so as to come under the provision of the Sales Tax Law, giving to it the *201 privilege of paying the lesser 1% tax, rendered judgment in favor of the defendant. From this judgment plaintiff appeals.
Counsel for appellant states that Sec. 4 (e) of the Selective Sales Tax Act of 1937, Id. Sec. 32-2504 (e) W.C.S. 1945, insofar as it attempts to levy against the vendor, a 1% tax on sales of twenty-four cents (24c) and under is unconstitutional and void by reason of the United States and the Wyoming Constitutional provisions above quoted. That portion of the Statute referred to reads as follows:
"* * * provided, that the tax on all sales of twenty-four (24c) cents or less shall be one percent, and provided further, that the purchaser, consumer and user of any single unit purchase of twenty-four (24c) cents or less, shall not be required to pay the tax provided herein and provided further that the tax of one percent herein imposed on all purchases of twenty-four (24c) cents or less shall be assumed and paid for by the vendor who shall keep a detailed segregated record of all such sales. Any vendor who shall so elect may, in lieu of keeping such detailed segregated record, pay a tax of two (2) per cent, on his total sales upon which the tax provided herein is imposed."
First of all, in order for plaintiff to raise this constitutional question it must show that its rights are affected thereby, that the enforcement of the law would be an infringement on its rights, or that it would be injuriously affected. This has not been shown.
The burden of proof was upon the plaintiff to show by facts proved on trial that the sales made of twenty-four cents (24c) and under were segregated, amounted to so much in money and the tax of 1% amounted to a certain sum. While alleged in the petition it has been denied in the answer and no proof was offered thereon, so that there is a total failure of proof. Counsel for *202 plaintiff admits in his brief that there is no proof in the record of the amount of the 1% tax. We quote:
"In other words, on the basis of the record as it now stands, the court could not find what amount should be assessed as 1% tax because we have made no effort to show the amount thereof. But when it is established by the pleadings that plaintiff has paid to the State of Wyoming all the 2% tax assessed against and collected from its customers, then we submit that we have established that every amount due the State of Wyoming has been paid unless the tax be constitutional."
Even though plaintiff paid a 2% tax it would be necessary in the instant case to show a segregation of sales twenty-four cents (24c) and under and the amount of the 1% tax before a constitutional question could be raised. In other words, there is no factual basis upon which to base the constitutional question to which plaintiff seeks an answer.
We are of the opinion that the trial court was correct in rendering judgment in favor of the defendant and against the plaintiff.
It is well said in 16 C.J.S. 157, Sec. 76, under the title Constitutional Law, that:
"A person may challenge the constitutionality of a statute only when and so far as it is being, or is about to be, applied to his disadvantage.
"It is a firmly established principle of law that the constitutionality of a statute or ordinance may not be attacked by one whose rights are not, or are not about to be, adversely affected by the operation of the statute. This rule applies to all cases both at law and in equity, and is equally applicable in both civil and criminal proceedings. One of the many variations of this rule is the principle that one may not urge the unconstitutionality of a statute who is not harmfully affected by the particular feature of the statute alleged to be in conflict with the constitution. A constitutional question may *203 not be raised by one whose rights are not directly and certainly affected. * * *"
Beginning with the case of McKinney vs. State, 3 Wyo. 719-727, decided at the April A.D. 1892 term of this court, and in many cases thereafter, this court has agreed with the principle of law above stated. In the McKinney case, supra, our court said:
"The courts will not listen to an objection made to the constitutionality of an act by a party whose rights it does not affect, and who therefore has no interest in defeating it." Cooley, Const. Lim. 164.
As Judge Blume had occasion to say in Salt Creek Transp. Co. vs. Public Service Commission, 37 Wyo. 488-497, 263 P. 621:
"The law is well settled that it is not sufficient for a party to say that a statute is unconstitutional as to other persons or classes of persons. It must appear that it is unconstitutional as to the person attacking it."
In the late case of In Re Edelmans Estate 68 Wyo. 30-49, 228 P. (2d) 408, Judge Riner, speaking for this court, called attention to this principle of law:
"It is firmly established principle of law that the constitutionality of a statute or ordinance may not be attacked by one whose rights are not, or are not about to be, adversely affected by the operation of the Statute."
See also, State v. Smart, 18 Wyo. 436, 110 P. 715, State v. Kelley, 17 Wyo. 335, 98 P. 886; Zancanelli vs. Central Coal Co. 25 Wyo. 511, 173 P. 981; State ex rel Voiles vs. Johnson County High School 43 Wyo. 494, 5 P. (2d) 255; Cuthbertson vs. Union Pacific Coal Co. 50 Wyo. 441, 62 P. (2d) 311; State ex rel Keefe vs. McInerney 63 Wyo. 280, 182 P. (2d) 28.
Finding no error in the record the judgment of the trial court is affirmed.
Affirmed.
RINER, J.; PARKER, District Judge, concur.


519 A.2d 723 (1987)
GENDRON REALTY, INC.
v.
N.J. GENDRON LUMBER CO., INC. OF PORTLAND, Maine.
Supreme Judicial Court of Maine.
Argued November 13, 1986.
Decided January 7, 1987.
*724 Bernstein, Shur, Sawyer & Nelson, Andrew Bernstein (orally), Portland, for plaintiff.
Richardson, Tyler & Troubh, Wendell G. Large, Elizabeth G. Stouder, Edwin A. Heisler (orally), Portland, for defendant.
Before NICHOLS, ROBERTS, WATHEN, GLASSMAN, SCOLNIK and CLIFFORD, JJ.
SCOLNIK, Justice.
The defendant, N.J. Gendron Lumber Co., Inc. of Portland, Maine (the Lumber Company) appeals from a judgment entered after a jury-waived trial in the Superior Court (Cumberland County) in favor of the plaintiff, Gendron Realty, Inc. (Gendron Realty) in the sum of $32,529.03 on a breach of contract claim for a real estate broker's commission. This case presents the novel issue of what constitutes "negotiating" between a real estate broker and a prospective purchaser of industrial property under the terms of an exclusive right to sell real estate agreement. For the reasons set forth herein, we vacate the judgment.

I.
The following facts are undisputed: On March 23, 1982, the Lumber Company and Gendron Realty entered into an "Exclusive Right to Sell" Agreement (Agreement) for a term of 12 months, from March 23, 1982 through March 23, 1983. Under the terms of the Agreement, Gendron Realty was given the exclusive right to sell, for a stated broker's commission, the Lumber Company's industrial property, located at Warren Avenue in Portland, Maine, at a sales price of $359,000. The Agreement, which was prepared on one of Gendron Realty's form contracts, contained an extension clause that read as follows:
We agree that if a prospect with whom the said Broker [Gendron Realty] or associates have been negotiating purchases the said property within six months after the termination of this agreement, the commission shall be due and payable.
(Emphasis added.)
After entering into the Agreement, Gendron Realty worked with another real estate broker, the Boulos Company (Boulos), to find a buyer for the property. Thus, Boulos became an "associate" of Gendron Realty under the terms of the extension clause. Boulos and Gendron Realty agreed to share equally the commission payable under the Agreement.
Sometime in early February 1983, Boulos showed the property and quoted an offering price to the Roberts Office Supply Company (Roberts). Roberts entered into a contract with another seller, however, and did not pursue its interest in the Warren Avenue property until late March, 1983, after failing to consummate the other contract. Only Richard Berry, the owner of Roberts, could make ultimate decisions concerning the purchase of any property.
Before March 23, 1983, Gendron Realty asked the Lumber Company to renew the Agreement, but the Lumber Company refused on the grounds that the property might be taken off the market.
With the permission of the Lumber Company, obtained through Gendron Realty, *725 Boulos showed the property to Roberts a second time, on March 28, 1983, five days after the expiration of the Agreement. Boulos quoted Roberts the same offering price as before. In preparation for the March 28th showing, Boulos furnished Roberts with information on the property.
On April 28, 1983, more than a month after the expiration date of the Agreement, but before the expiration of the 6 month extension clause in the Agreement, the Lumber Company entered into a second "Exclusive Listing Agreement" with another broker, MacBride-Dunham Group (MacBride-Dunham). Four days later, on May 2, 1983, the Lumber Company entered into a purchase-and-sale agreement to sell the Warren Avenue property to Roberts "or its designee" for $275,000. The property was sold to Richard Berry and subsequently occupied by Roberts. The record implies that the Lumber Company paid MacBride-Dunham a commission of $22,500 for the sale.

II.
The central issue on appeal is whether Gendron Realty and Boulos or both had been "negotiating" with Roberts before March 23, 1983 under the terms of the extension clause of the Agreement. We "will hold open to corrective judicial review conclusions resulting from the application of a general legal principle to the facts of a particular case." Interstate Industrial Uniform Rental Service, Inc. v. Couri Pontiac, Inc., 355 A.2d 913, 917 (Me.1976). The interpretation of a particular term within a written contract is a question of law. See O'Leary v. Menard, 118 Me. 25, 27, 105 A. 399, 400 (1919) (interpretation of the meaning of the word "dependent" in written contract and application of that word to undisputed facts is issue of law).
The meaning of the term "negotiating" in the Agreement between these parties is ambiguous. Cf. Barrick Realty Co. v. Bogan, 422 N.E.2d 1306, 1308 (Ind.Ct. App.1981); Vint v. Ashland, 258 Iowa 591, 139 N.W.2d 457, 459 (1966). We resolve any ambiguities in its construction against Gendron Realty, the party who drafted the language and supplied the form contract containing it. See Hills v. Gardiner Savings Institution, 309 A.2d 877, 881 (Me. 1973); Bourgoin v. Fortier, 310 A.2d 618, 620 (Me.1973).
The Superior Court concluded that Gendron Realty "advanced the sales process to the point where Roberts Office Supply Co. was a realistic or likely prospect" and was therefore entitled to a commission from the Lumber Company because it had been negotiating with Roberts under the terms of the Agreement. This conclusion rested on the court's finding that Gendron Realty, through its associate, Boulos, located Roberts, supplied it with certain information regarding the property, and provided an asking price.
We vacate the Superior Court's judgment because we are unable to accept its definition of the term "negotiating."
We hold that in the absence of extrinsic evidence suggesting that the parties to such a contract intended a contrary meaning, the term "negotiating" in the context of the extension clause of a real estate broker's contract means a dialogue aimed at the adjustment or resolution of differences in order to strike a bargain. It involves more than the mere showing of property that is offered for sale or the unilateral provision of information concerning the property. Cf. Moses v. Gagne, 140 Vt. 43, 433 A.2d 315 (1981); see also King v. Dean, 15 Ohio App.2d 15, 238 N.E.2d 828 (1968), rev'd on other grounds, 19 Ohio St.2d 17, 249 N.E.2d 45 (1969).
Applying that definition to the facts of this case, and finding no extrinsic evidence that the parties intended to attach a different meaning to the word "negotiating," we conclude that the record does not support a finding that Gendron Realty or its associate, Boulos, had been negotiating with Roberts on or before March 23, 1983, the expiration date of the Agreement. Before that date there was one routine, preliminary *726 showing and certain information was provided by Boulos to Roberts. All that had been communicated by Roberts to Gendron Realty or Boulos was an interest in seeing the property a second time. This evidence is insufficient to support a finding of negotiation. Accordingly, Gendron Realty was not entitled to a commission under the terms of the Agreement.[1]
The entry is:
The Superior Court's judgment in favor of Gendron Realty on its contract claim against the Lumber Company is vacated. The case is remanded with instructions to enter judgment for the Lumber Company.
All concurring.
NOTES
[1]  Having reached this conclusion, we need not consider collateral issues raised by the Lumber Company, including the correctness of the Superior Court's decision on its counterclaim that was asserted only in the event that it was found liable to Gendron Realty under the Agreement.


872 F.2d 1027
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Tony H. PAYNE, Plaintiff-Appellant,v.The LAW CENTER, J.D. Lee, d/b/a Lee Legal Clinic, J.D. Lee,d/b/a The Law Center, P.C., J.D. Lee,Individually, Defendants-Appellees.
No. 88-5631.
United States Court of Appeals, Sixth Circuit.
April 21, 1989.

Before ENGEL, Chief Judge, BOGGS, Circuit Judge, and AVERN COHN,* District Judge.
PER CURIAM.

1
Tony Payne appeals from a directed verdict entered in the United States District Court for the Eastern District of Tennessee in his action alleging breach of contract and professional negligence against his former attorney, J.D. Lee, for negligently failing to timely file a personal injury suit.  Payne claims that Lee should have pursued an action against H. Pat Wood and Ben Bower for damages sustained when Payne was injured while working on a construction project that took place on their adjoining properties.

2
Payne was injured on March 17, 1981, while working in the employ of Ron Tallent.  Tallent had contracted with Wood and Bower to build two channels, a rock riprap wall and a boat dock located on their properties in Tennessee.  Tallent, Payne and another of Tallent's employees were turning over a section of the dock when they lost control of it in gusty winds.  The section fell on Payne, severely injuring his spinal cord.

3
Payne first sought legal assistance from attorney Ralph Brown, who filed a worker's compensation claim on his behalf.  Subsequently, Payne sought legal assistance from Lee, who agreed to pursue Payne's worker's compensation claim and to take necessary actions to pursue a "third party" claim for Payne's personal injuries.  After the applicable one-year statute of limitations period had run on such a claim, Lee wrote Payne, informing him that there was, in Lee's opinion, no basis for a "third party" claim against Wood or Bower.  Eventually, apparently with the services of a third attorney, Payne recovered worker's compensation benefits.

4
Payne then brought suit in state court against Lee for breach of contract and professional malpractice.  Payne alleged that Lee had negligently failed to pursue a "third party" personal injury claim against Wood and Bower for their negligence in the selection of Tallent as the independent contractor for their construction project.  The case was tried before a jury;  however, when the jury was unable to reach a verdict, a mistrial was declared.  Payne then took a voluntary nonsuit pursuant to Tennessee rules of procedure.

5
After moving to Georgia, Payne filed this diversity action in the district court, repeating the claims he had raised in state court.  A trial was commenced, but after Payne had presented his case, the district court entered a directed verdict for the defendants, stating its reasons on the record and supplementing its oral decision with a written Memorandum and Order.  The district court determined, viewing the evidence in the light most favorable to Payne, that there was no evidence from which a jury could conclude that Payne had established a necessary element of his claim, damages.

6
The district court set out three reasons why Payne was not damaged by Lee's failure to file the action against Wood and Bower.  First, while Tennessee courts have recognized that an employer must use due care in selecting a competent contractor to perform the work contemplated by a contract, they would not hold that the duty extends to the employees of the contractor.  Second, even if Wood and Bower did owe Payne such a duty, a jury could not find, on the facts of this case, that the duty had been breached.  Third, even if Wood had negligently hired Tallent, the injury to Payne was caused not by Tallent's inability to perform the work contemplated by the contract, but by his inattention or negligence in handling the dock section in the gusty winds that existed at the time of the accident.

7
On appeal, Payne contends that the district court erred in granting the directed verdict.  He argues that, under Tennessee law, an employer's duty to use due care in selecting a competent independent contractor extends to the employees of the contractor.  He also claims that the district court erred in finding that there was no evidence from which a jury could conclude that Wood had been negligent in hiring Tallent, and consequently that Payne had been damaged by Lee's negligent failure to pursue the "third party" claim.  Finally, Payne argues that even if the jury would have found that Lee's negligence did not proximately result in actual damages, he was entitled to have the jury award nominal damages because of Lee's breach of contract.

8
More specifically, Payne challenges the district court's reliance on Cooper v. Metropolitan Government of Nashville, 628 S.W.2d 30 (Tenn.App.1981) (affirming summary judgment for defendant) in reaching its decision regarding the scope of an employer's duty under Tennessee law.  There, a contractor's employee, who was killed by electrocution while doing tree-work, sued the government agency that had contracted out the work.  While Payne correctly points out that the Tennessee court dismissed the plaintiff's "negligent hiring of a contractor" claim on factual, and not legal grounds, this fact alone does not necessarily support Payne's claim that Cooper supports his view of the law.  In fact, as the district court recognizes in its opinion, the state court's discussion of Cooper's second cause of action suggests that Payne's view of Tennessee law is incorrect.  Memorandum and Order at 4.

9
Cooper's second cause of action was based upon another exception to the general principle that employers are not liable for the negligence of their independent contractors, the "inherently dangerous work exception."    The Tennessee court declined to extend to a contractor's employee the duty owed under that "exception," in part, because it would be impractical to require the employer of the contractor to protect the contractor's employees.  The court also noted that employees are already entitled to seek worker's compensation.  As the district court points out, these reasons apply with equal force to the tort of "negligent hiring of a contractor."    Memorandum and Order at 5-6.

10
Payne also questions the district court's reliance on Knoxville Iron Co. v. Dobson, 75 Tenn. 367 (1881), by citing Powell v. Virginia Construction Co., 88 Tenn. 692, 13 S.W. 691, 692 (1890).  However, Powell, in dicta, simply recognizes the general principle of liability for the negligent hiring of a contractor, and expresses no view as to whether it should be extended to protect the contractor's employee.

11
In addition, Payne argues that our decision in Mooney v. Stainless, Inc., 338 F.2d 127 (6th Cir.1964), affirmatively supports his view of Tennessee law.  He does so despite the district court's express refusal to rely on that case.  Memorandum and Order at 4.  In Mooney, our court clearly indicates that Tennessee has adopted the general principle that an employer can be held liable for negligently hiring an independent contractor.  We also implicitly assume that such a claim can be raised by an employee of the contractor.  However, as the district court points out, we do not address the issue, finding instead that plaintiff has failed to meet his burden of proof on the issue of negligence.  We also question whether liability could be based on the facts involved in that case, where the contractor was generally competent, but caused the injury solely by his inattention or negligence.   Id. at 132.  Therefore, we are not persuaded that our decision in Mooney requires us to reverse the district court's opinion.

12
For the foregoing reasons and for the other reasons so carefully set forth by United States District Judge R. Allen Edgar in his Memorandum and Order filed in the district court on March 27, 1988, the judgment of the district court is AFFIRMED.

*
 The Honorable Avern Cohn, United States District Judge for the Eastern District of Michigan, sitting by designation


441 N.W.2d 766 (1989)
Judith L. MEYER, Appellee,
v.
EMPLOYMENT APPEAL BOARD and Indian Hills Community College, Appellants.
No. 87-1625.
Supreme Court of Iowa.
June 14, 1989.
*767 Blair H. Dewey and William C. Whitten, Des Moines, for appellants.
Gerald L. Hammond of Sayre & Gribble, P.C., Des Moines, for appellee.
Considered by McGIVERIN, C.J., and HARRIS, CARTER, SNELL and ANDREASEN, JJ.
HARRIS, Justice.
A teacher contracted to perform her duties during a nine-month school year and to draw her salary on an annual basis. Her employment terminated during the nine-month school year. The question here is whether she is entitled to statutory unemployment benefits during the months of the contract year after her services were to be completed. The district court, reversing an agency determination, held she was entitled to benefits. We agree.
Petitioner Judith Meyer was hired in 1978 as a full-time nursing instructor for a community college. There was a written employment contract which was negotiated and renewed each year. Under the contract Judith worked only nine months each year, from September to May. She was not obligated to perform any services during the last three months of the contract year (June, July, and August). She was however paid in twenty-four equal installments over the entire twelve months.
At the time in dispute Judith was employed under a contract which commenced August 26, 1985, and was to end August 25, 1986. On February 19, 1986, Judith was notified that her contract would not be renewed. She resigned the following day. The resignation was pursuant to a settlement. It was agreed that Judith would draw her salary through August and be available for consultation through the school term. Soon after resigning Judith filed a claim for unemployment benefits for the period after February 23. Her claim was denied because she left her employment prior to her scheduled date of layoff. After Judith's appeal of the denial was affirmed by the employment appeal board she brought this petition for judicial review.
On review the district court agreed with the denial of Judith's claim for the period ending May 15, 1986. This part of Judith's claim is not at issue. The district court did however reverse the board in part, allowing Judith's claim for the period beginning May 15, when her actual services were to end. The board appealed the district court's allowance of this part of Judith's claim. We granted further review of a divided court of appeals decision affirming the district court.
I. Iowa Code section 17A.19 (1989) prescribes the court's role on judicial review of agency action. Morrison v. Century Eng'g, 434 N.W.2d 874, 876 (Iowa 1989). The district court and this court serve only in an appellate capacity to correct any errors of law on the part of the agency. Barker v. Iowa Dep't of Transp., 431 N.W.2d 348, 349 (Iowa 1988).
II. It is important that Judith's claim involves a period following termination of her employment and not a routine summer vacation following a normal teaching year. An Iowa statute prevents teachers from receiving unemployment compensation during summer months when they have "reasonable assurance" they will be teaching in any school the following year. Iowa Code § 96.4(5)(a). See also Merged Area (Educ.) VII v. Iowa Dep't of Job *768 Serv., 367 N.W.2d 272, 274 (Iowa App. 1985). Because Judith had no such reasonable assurances the statute does not apply.
III. The case is complicated by the fact that the parties disagree on not only the answer but also the question. The board sees the case as a voluntary quit dispute. Employees are disqualified from benefits if they voluntarily quit without good cause attributable to their employer. Iowa Code § 96.5(1). The board cites a rule that this disqualification applies when the employee quits in anticipation of an expected layoff. 345 Iowa Admin. Code § 4.25(29).
Special rules apply to persons who voluntarily quit after being told of a scheduled layoff. They are disqualified from benefits from the last day of work until the day of the scheduled layoff. But they are entitled to benefits beginning on the day of the scheduled layoff. 345 Iowa Admin. Code 4.25(40).
Similarly, we think, the voluntary quit defense here is limited to the period during which Judith was to perform services. It does not reach the period (after May 15) for which the district court determined Judith was entitled to benefits.
IV. Persons are eligible for benefits only for weeks in which they are "totally unemployed." Iowa Code § 96.3(2). "Totally unemployed" is a term of art with a statutory definition:
An individual shall be deemed "totally unemployed" in any week with respect to which no wages are payable to the individual and during which the individual performs no services.
Iowa Code § 96.19(9)(a).
There is no dispute that Judith qualifies for the second of the two requirements under this definition. She performed no service (and was under no obligation to do so) during the period still at issue. The question arises under the first requirement, whether "no wages [were] payable" during the weeks involved.
The court of appeals dissenters saw the statutory plan as based more on immediate need than fairness. After all Judith did contract to draw her compensation over a twelve-month period and thus provided she would not, during any of the twelve months, experience the financial adversity our unemployment compensation system is intended to address.
Judith of course contends she drew no wages after May 15, but merely elected to defer collecting past earnings until then. She argues, with considerable logic, that it would be grossly unfair to penalize her for opting to spread the receipt of past earnings on a twelve-month rather than a nine-month basis. She correctly states that, had she elected to be paid on a nine-month basis, she would be entitled to benefits.
There is support for Judith's interpretation in Town of South Hadley v. Director of Division of Employment Security, 450 N.E.2d 596 (Mass.1983), a case relied on both by the district court and the court of appeals. The Hadley court stated: "The test is not in what week the remuneration is received but in what week it is earned or to which it may reasonably be considered to apply." Id. at 598.
We think there is also support for Judith in an administrative definition found at 345 Iowa Admin. Code 4.13(2)(o). It states in part:
The following items are not considered as wages and are not deductible from job insurance.

. . . . .
o. Deferred wage compensation. Remuneration received by the claimant for wages earned in a prior period shall not be deductible in a subsequent period.
Although it was promulgated long after this dispute arose (it was effective May 25, 1988) another administrative rule indicates a department view consistent with Judith's. 345 Administrative Code 4.52(8) reads:
Wages earned and payment deferred. Many school employees receive remuneration from their school employers on a twelve (12)-month basis for the nine (9)-month period worked. Deductions from job insurance payments are on a "when earned" basis rather than on a "when paid" basis. Deferred wages currently *769 paid which are based on earnings from a prior period are not deductible on a current week claimed pursuant to Iowa Code section 96.19(9) "b" and subrule 4.13(2), paragraph "o."
Although these rules relate to partial unemployment they do indicate an agency view that deferred wages for services completely performed should not necessarily be considered as wages payable under Iowa Code section 96.19(9)(a).
We think Judith's deferred wages were actually "payable" to her when they were earned. The community college did not claim any advantage resulted to it by spreading payments over the entire twelve months. On this record we must assume that Judith opted to delay receiving a portion of her wages, payable earlier, merely as a convenience to her. In proscribing benefits during the weeks when "wages are payable," we do not believe the legislature intended to include Judith's deferred wages for services already performed.
The district court was correct in determining that Judith was not disqualified from compensation following termination of her employment by reason of receiving wages deferred from past earnings.
DECISION OF COURT OF APPEALS AND JUDGMENT OF DISTRICT COURT AFFIRMED.
All Justices concur except CARTER, J. who dissents.
CARTER, Justice (dissenting).
I dissent.
In order to gain unemployment benefit eligibility, Iowa Code section 96.3(2) requires a claimant to show that the dual conditions of absence of wage entitlement and absence of work coincide during the same week. That is the way the statute is written. It is inconceivable that it would have been written that way had it not been intended that these two conditions coincide during any week in which benefits are claimed.
The administrative regulations relied on by the majority to establish benefit eligibility do not purport to deal with benefit eligibility. Those regulations only govern the amount of benefits which are payable to those persons eligible under the basic requirements set forth in section 96.3(2).
The majority alludes to a supposed unfairness in the treatment accorded this claimant by the agency as compared to other unemployed teachers who have elected to be paid over a nine-month period. I submit that this court's sense of fairness is not a proper standard by which to measure eligibility under unambiguous statutory criteria. Moreover, if comparisons are to be made, there is a much more relative comparison available in evaluating the merit of the agency's position. That is the comparison which may be drawn by matching the situation of a teacher paid on a twelve-month basis whose contract is terminated in May, with the situation of a teacher paid on a twelve-month basis whose contract is renewed for the following school year.
In the situations being compared, both persons receive the same relative level of subsistence income during the summer months. Both persons perform no services during the summer months. But, under the majority's interpretation of the statute, the first person is entitled to receive unemployment benefits although the second person is expressly made ineligible for unemployment benefits by the provisions of Iowa Code section 96.4(5)(a) and (b).
Those in the second person's situation constitute a much larger number of workers than those in the first person's situation. Consequently, in acting to cure a discrimination affecting a few persons, the majority is simultaneously creating a different classification which discriminates against a much larger category of persons.
I submit that the agency is more nearly treating like situations in a like manner than is true under the position taken by the majority of this court. Moreover, in so doing, the agency is not unfaithful to the principle that the policy of the unemployment security laws is to maintain a reasonable level of purchasing power in order to avoid serious social consequences of poor relief assistance. See Declaration of Policy *770 contained in Iowa Code section 96.2 (1989). The claimant's financial situation has not been demonstrated to be such that the denial of benefits offends against this policy.