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Strategies & Market Trends : Tech Stock Options

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To: Kevin who wrote (19377)	8/13/1997 3:10:00 PM
From: broken_cookie	of 58727

Hi Kevin, Got some TXNIF's @ 3 3/4. Congrats on the "dead" MU's. There's something I have been thinking about. Someone posted this URL to a great post on the asnd thread a few days ago. techstocks.com Seems that most of the people that try to predict OI's effect on waning days of options just eyeball the OI to calculate the point of overall zero return on the sum of all open positions. It's fairly easy to construct a spread sheet that solves the polynomial which sums all open positions. I was doing this for a while with INTC but it got too time consuming to enter the data. (I'm no excel whiz.) There's another problem with this approach. It assumes a possible negative value for some positions when, in reality, they can go only to zero. This effect is relatively minor, but skews zero value (theoretical value at expiry) down because there are usually a larger number of out of the money calls than puts. I was thinking of writing a program that would accept correctly formatted data and do a true calculation of zero value. I also need to be sure I have true OI data. I have been using Pacific Brokerage's data because it's all on one page so I can cut and paste it out in a single operation. I don't think that the underlying stock price would trade exactly to the zero value price, but a strong divergance between current price and predicted expiry price would yield another tool to predict direction of the stock. If you or Patrick or any one else is interested in this OI stuff, please let me know your thoughts. Take care and watch those high dives. :) PS 140+ on the road, dirt bike racing, and balcony dives!!! Are you really suprised your wife is upping your life insurance. <e2e>

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