SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Waiting for the big Kahuna
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Grandk who wrote (79747)3/15/2008 12:43:40 PM
From: Real Man  Read Replies (1) of 94695
 
Normally, yes, a rally due to excessive March put options
being in the money. As traders take profits,
the ARBs buy futures and the markets rally.
In rare cases when the markets are DOWN enormously, 1987
scenario unfolds - as the markets crash through OOM put
strikes, the ARBs are forced to hedge by selling futures.

Risk is both ways this week, and it's hard to tell. However,
dumb Fed is enormously DRAINING liquidity in the system for
end of March TAF launch, which, in turn, may cause sharply
increased volatility. This is NOT good for return to
equillibrium expiration bet, so the other bet has higher
probability than it normally would, solely due to this action.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News