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Strategies & Market Trends : Tech Stock Options
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To: Esteban who wrote (30114)12/3/1997 1:41:00 PM
From: Patrick Slevin  Read Replies (1) of 58727
 
The primary advantage...to me anyway....is so one understands the likely logic behind a sharp move.

Minor sell programs kicked in around 11:48 EST after the SP7Z dropped thru 971 and the PREM went to 0.65. The advantage to being aware that there were sell programs enables you to make an educated guess as to what was going on...in this case running stops. The SP7Z ran from ~971 to 967.70 in 6 minutes.

Being aware that it was probably in part due to sell programs would lend more balance to any decision one might make as to whether or not to exit a long position. The reverse of course would also be true for a short position.

Also, for a scalper, the above example may be just the exit point one would want to take profits on a short position.

Again, it's just something I use to be aware of so I can take as many emotions out of the trading decisions as possible.
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