Lisa,
"what about the discussion we were having about trading these versus the overvalued ones? what has changed your minds and have you been watching this happen"
I still believe in buying low selling high, but what I am saying about undervalued option positions will only work for the SPX and the OEX if you hold them until they move outside the current range, like how TT holds until 40 points, then the undervaluement stabalizes (example if a position at 930 was undervalued by 3 or 4, once the SPX is at 960, the position wont be undervalued anymore, because everyone trading short term will be trading at the 960 positions and there wont be action for the MM's to mainpulate)
Or better put this is rephrasing it.. MM's cant manipulate a point that is lightly traded as easy, it isnt worth it. And the more expensive the position the less it is traded.
Look at any stock... try to tell me that the Feb TBR 80's are undervalued.. they arent, just as the SPX 900's (might be severe there) are not undervalued either.
My contention is if you want to get in when it is under, you have to HOLD until it isnt within the current price or within 20 points of the current price.
"I dont follow your thinking here...why do you say they arent manipulated....that you can get correct valuation. If they are overvalued by 2 ...1 can easily be stripped away
I guess I am trying to figure out the foundation for your argument and after that...how have you seen it work.
Why are overvalued ones manipulated less than undervalued ones.
The only thing I can understand about it is the concept that the herd might go to the undervalued ones and thus the MM's would try to manipulate the more.... the average guy goes to the ones with low dollar premium when he buys 10 contracts."
What the MM's need to strip is ACTION, movement, interest from both sides, buying and selling.. and at the points above or below (calls vs puts) there isnt any action.. So I say if you want to play in the majors, you need to pony up to the table with $$$$$$$
Or you will continue to be jerked around like you have been and everyone is... Or have to wait for HUGE swings to make $$$$$
Finally, on TBR and IBM, I will yell at you, ok?
Kevin told all of us about IBM at 98, we talked about it and look now, IBM at 105.. It works..
See ya, thanks for listening.. any Q's???
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