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Strategies & Market Trends : Tech Stock Options
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To: ViperChick Secret Agent 006.9 who wrote (33473)1/17/1998 5:53:00 PM
From: j g cordes  Read Replies (2) of 58727
 
Lisa.. waving my hand in the air... re: "the first group of numbers (the index positions that are nearest to the current number) are all traded by every you know who that index trades, for the main reason you stated, they are reasonably priced. And these positions are the ones that are undervalued and how can I say it "stripped" by the MM's and manipulated. So if you get into one of these you are likely to see continual undervalument,manipulation and lack of point for point movemment."

Accordingly wouldn't an index, as it rises or falls outside those positions "nearest the current number" become "the points outside of the current index trading points, they are more correctly priced, they are overvalued and arent manipulated"?

If you had trouble with the syntax it isn't my fault. Here's my follow on.

In other words, if the manipulation theory is correct, the bad guys try to take your money at strike price contracts closest to the current index price... wherever it is trading.

If this is true, the manipulation should be quantifiable as a varrying premium relative to the index price and the strike prices around it. If you can see it this way, then you'd expect your contract price to vary in a predictable way as the actual index price moves towards it or away from it. Any change in the time/premium slope of your contract then indicates a momentum or expectation change on the floor. This could be easily graphed and recalculated as prices change.

Jim
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