Galapagos Islands Message Board

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Strategies & Market Trends : Galapagos Islands

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To: stomper who wrote (12260)	11/9/2002 12:36:19 PM
From: mishedlo	Read Replies (1) of 57110

CBOE is F'd up because it only contains CBOE figures and not all exchanges that trade options. Sometimes there is a big difference. The volumes are CBOE volumes and the PC ratio is CBOE only as well. Useless. CBOE OI at eod is accurate and I consider taht to be the bible. Furthermore, if I traded and closed puts 10 times in a day, that would jack up PC ratio but be meaningless noise cause it did not affect OI one iota. Another reason to be suspicious of PC ratios even if all exchanges are included. This is yet another reason why I believe monitoring actual buildup of open contracts is more valuable than PC ratio. Finally closing of puts in mass would send PC ratio soaring but closing of puts vs buying of puts are far different things and would affect VIX in opposite ways. IMO a closing of a PUT should go into CALL data and closing of a call should go into put data. Thus PC ratios are hard to use unless OI is considered. If you are looking at OI then you do not need PC ratio at all. Does this explanation help.? M

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