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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts

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To: kimberley who wrote (62667)6/14/2022 4:05:01 PM
From: ajtj992 Recommendations

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catou1
kimberley

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Over 2-decades ago I started tracking Max Pain. There was a study done that showed it typically was taken care of by Tuesday the week of monthly expiration. I did more work and made the monthly op-ex window from the Wed the week prior to expiration into the Tuesday the week of expiration.

Usually, Max Pain was hit during that window, and price could do whatever once that happened.

However, when weekly options began to proliferate under the free option trading offered by brokers, that system became broken.

However, just because it is broken does not mean it no longer functions.

This op-ex is a quarterly one, which means most of the open interest positions are old and have long ago been hedged by the market making software. The movement left relating to op-ex will likely be algos that try to squeeze things either short or long on Thurs/Fri.

I actually think tomorrow's weekly expiration is a bigger deal than Friday's monthly expiration as far as the ability to predict market direction.
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