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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Mike Johnston who wrote (50298)	1/19/2006 5:39:47 PM
From: Jack of All Trades	Read Replies (1) of 110194

I think some of what you see is options related and some short related. The dump that XLNX took back in Oct was on 10X avg vol. If indeed lots of traders were taking the short side and buying puts that provides the fuel for buying pressure. When you buy puts, who do you think you are buying them from? If you are buying from someone that is writing them, then they need to open or have a short position to hedge. Just as a call writer would buy the underlying to hedge. When price didn't keep falling shorts became underwater and caused the price to move. Don't forget, MFunds have a reason to keep prices moving up, so it's easier when they have shorts too squeeze. JMO

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