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Strategies & Market Trends : Swing Trading With Options

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To: underdog430 who started this subject	8/8/2001 5:18:57 PM
From: underdog430	Read Replies (3) of 88

Open Interest and Volume I picked up a copy of Bernie Shaeffer's Option Advisor (dated July 26) this weekend and I thought that it was a decent newsletter if a bit thin. One of the things that I found interesting about his analysis was his use of open interest to identify support and resistance. For example, he referred to the call interest at the 45 strike on AOL as providing "another layer of potential overhead resistance" and he noted that the put interest at the 25 strike on FLEX "could offer downside support." I was taking a look at the time and sales for some of the QQQ options with high open interest and I was surprised to see some of the volume reported - there are trades indicated for thousands of contracts. There are lots of trades indicated for smaller sizes that still seem awfully big for retail customers. How much of option trading is retail vs. institutional? When the trading is institutional, are they really placing their bets with options or are the options merely a hedge? Mark

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