Patrick,
I agree with you on the interpretation of the PUT to CALL volume.
I had also noticed that by watching the volume on a daily basis that the the volume of PUTs was increasing on only the index options but the PUT volume on stocks were still very high.
There has to be a reason why there was such a large discrepency between the P/C ration for index options and stock options. So I ask a few brokers what their thoughts were. One works at a small independent broker, the other 3 worked at large firms. They all came back with the same comment that they were not sure but since they and most of their office do not do options, they suspected that the stock option volume was indicative of the normal investor and that the index volume was more indicative of the experienced traders/big boys.
I am just learning about PUT/CALL ratios, so I am no expert here. Just relaying what these brokers indicated, but it makes sense.
As to how those volumes, indicated by Kevin, will effect the market - it appears neutral overall. My understanding is that .7 is borderline. Correct me if I am wrong.
Just thought of something and this could be off the wall. There is a high PUT volume on indexes and most of the indexes expire on Thurday and the high call volume is in stocks. I would think that it would make sense that the best senerio would be for those who wrote the options, which I believe are the big-boys, is that today and Thurs day will relatively flat so many of the INDEX PUTS will go worthless/little profit, and then on Friday the market drops alot to make alot the CALLS on stocks expire worthless.
Also the PUT volume increase during the last week near the top, while the majority of the CALLS are at lower levels.
Does that make any sense.
Seeya |
