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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: MythMan who wrote (333723)4/13/2007 6:19:20 PM
From: Real Man   of 436258
 
finance.yahoo.com
I look at options OI directly. QQQQ is not allowed to drop
below 44 for April. For May it looks like 45 now - there
are more 45 puts than calls.
finance.yahoo.com
June is 45 marginally as well
finance.yahoo.com
Tons of puts sitting at 44 and 43, for every month. These
are just computers buying. As time elapses, less hedging
of these puts is required. It can go the other way too -
as volativity increases, more hedging is required.
That was so 1987, though - computers are smarter nowadays. -g-
As long as the Fed prints on time, the latter does not happen.
Wall Street for sure uses Black Scholes modified by
volativity smile for options trading, which is done by
computers. It's a money maker. Money for nothing, chicks for
free... In front of the steamroller, of course, since
on rare occasions it can go the other way all the way,
and the same computer models will crash it -g-
So, here is a new strategy - when it goes the other way,
the banks go to the Fed. -g-
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