Luc, i saw a an LT chart of OEX put dollar volume in July, when it had just hit a string of consecutive all-time lows. since seeing that chart i have very closely watched how OEX options volume develops, and it has clearly shrunk since then. admittedly that goes for the OEX calls as well, as OEX options seem to be less and less popular. in any case, the amount of index put options volume in general has not kept pace with the volume on the stock exchanges. volume in individual equity calls otoh has exploded. what this tells me is that there is an increasing willingness to speculate in equity calls, while index puts which were primarily aimed at professional money managers wanting to hedge their market exposure are increasingly seen as a superfluous expense, because 'the market always comes back'.
there is simply no fear of steep declines anymore, as it is generally assumed that even if such a decline were to occur, the market would quickly reverse again with a helping hand from the merry pranksters at the Fed. in other words, the lessons of the past, namely that grinding, painful bear markets of long duration are possible, have been thoroughly forgotten.
hb |
