Warp, although I wasn't aware of the Max-pain theory, I was aware of how the biggest call open interest and biggest put interest created a "magnet" for a certain strike price.
Earlier this week, I mentioned the tech rally should start to fizzle as the Q's were trading above the strike price I thought would be the "magnet." Here were my comments:
>>> And, speaking of options, I think the QQQ has to finish out the week about $25. According to Price Headley, the most notable open interest is in the Nasdaq 100 Trust (QQQ - 24.80) at the 25 strike. The biggest call open interest lies at 194,121 contracts and the biggest put open interest at 77,555 contracts. It would appear that 25 is likely to be a "magnet" of sorts for the QQQ's to finish around on Friday's close and the Q's are trading slightly above $25 at this time. I think the tech rally starts to fizzle here soon. <<<
Message 17751004
My post was at 12 noon yesterday. Talk about timing! (har,har,har)
stockcharts.com[h,a]gaclyiay[d20020717,20020718][pb10!b50!b200!f][vc60][iut!Lh14,3]&pref=G
Q's started down, right on Q.
dabum |
