Sankar, re There may still be the January effect, you realize of course that the "January effect" refers to the commonly seen bounce in stocks that were down substantially late in the year from their highs earlier in the year with the bounce typically occuring between mid-December and mid-January. It would not apply to Yahoo!, unless of course you were talking about the "reverse January effect".
Re your argument for why writers may tempt buyers to a narrow range of strike prices (say, 40-45), what post was that? I must have missed something because I'm not following you. Why on earth would someone WANT to write calls at an artificially low price in a particular strike/expiry? It'd be easy for the buyer to take advantage of the discrepency and make outsized arbitrage profits by offsetting this position with other, fairly valued contracts and the underlying security.
If you want to see the activity in other strikes/expiries, go to cboe.com.
Finally, the writer does not have to be "more informed/powerful" than the buyer. They don't even have to disagree about the outlook for the stock. As an options expert, you should know this.
BTW, if anyone wants to see what a "zero-cost collar" looks like, take a look at the Feb 75 calls @$5 1/8 and Feb 65 puts @$4 7/8. Each has traded ~200 contracts which would protect $1.4mm of stock. Of course, I have no way of knowing that the trades are linked in any way, but . . .
HNY!!
Bob |
