ajtj's Post-Lobotomy Market Charts and Thoughts Message Board

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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts

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To: Qone0 who wrote (81657)	9/28/2023 6:07:18 PM
From: Lee Lichterman III	Read Replies (1) of 97594

I guess we'll have to agree to disagree. It would be too hard to try and track it accurately. Example, I would count today as a completion. At the beginning of the week I first posted about it. There were 88K puts open. From trading SPY myself, I know there is about a full point of decay per day as expiration gets close. Those puts probably lost at least 3 full points since then. So those are now profitable even if we close a couple points below now because of the decay and the seller's chance to rehedge from today's 430 hit. Yes, the MMs hedge accordingly but with the theta decay they can reel those hedges in as time goes by. That's what gamma is all about. As puts go in the money, those shorting the puts have to sell to hedge and when they come out of the money they buy to close those shorts. Time decay clouds the issue even more. Who's to say that isn't why harmonics really work. Between CTA funds, market makers hedging and dehedging and various assorted algos all trading when actual floor traders just using their guts, instincts and TA have dropped in influence, there could be some deep common harmonic patterns in all the calculus involved. If max pain was just the mood of the market, it should act more as a contrary indicator. Instead it usually acts as a magnet. Plus op ex often moves and reverses drastically like this week vs most times it trending. Most of the books I've read from "insiders" of the markets have them openly talking about how they would push the market in their favor close to contract expirations. The fun begins when two houses are on opposite sides and neither one wants to close out. I don't recall if it was market wizards or market wizards 2 where was a "who's going to blink" the night before expiration and the two traders even talked on the phone to each other about it knowing they were "The Market".

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