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To: mishedlo who wrote (213941)1/12/2003 3:47:06 PM
From: mishedlo  Read Replies (1) of 436258
 
Max pain:
An update and more thoughts added.

iqauto.com
On IBM Max pain is 80 but a glance at the chain suggests that puts outnumber calls at 70 75 and 80.
Calls outnmumber puts at 85 and above.
85 might be a better target that 80.

QLGC pain is 37 1/2 but there are not even close enough options on that to matter. Pain is irrelevant IMO.

EBAY pain is 65 but significant numbers of options are more centered around 70.

I like 20K minimun before a correlation can be made.
EBAY meets that but the "pain increase" from 70-to 65 is not that significant.

If QQQ pulls back to maximum pain QQQ 26, I would expect
EBAY 67
IBM 83
QLGC 38

Now the question is, does QQQ fall back to max pain or will they jam the tape?

If we close next week below 25.5 I think we are headed straight to the toilet.

Max pain on the individual issues only gonna happen if QQQ sinks. The key might be INTC tuesday evening.

CSCO max pain is 15 and they been keeping it close with 77K puts at 15.

Summary
QQQ 26 (but 25-26 near tossup) 24-27 not an immense amt of pain.
INTC 17.5 (but 15 - 20 range is not a lot of pain)
CSCO 15 (but the entire range of 12 1/2 to 5 is not a lot of difference)EBAY 65
IBM 80
QLGC 37 1/2
MSFT 55 (but the entire range of 50-60 is not a lot of pain difference)

Thoughts:
This close to expiry, these are about as wide a ranges as we have seen for some time.
There is lots of room for latitude here regarding what really is pain values. QQQ has been inching up from 25 towards 26. Earlier I had it at 25.4 or so but it is now 26+.

This is a very fluid situation, and how those contracts get rolled over is likely going to determine the direction in Febuary.

M
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