CFZ E-Wiggle Workspace Message Board

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Strategies & Market Trends : CFZ E-Wiggle Workspace

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To: skinowski who wrote (40594)	3/2/2025 1:56:35 PM
From: robert b furman	Read Replies (1) of 41456

Hi Ski, I put up the red fla on that concept. Perhaps it is the market maker neutralizin HIS account. Maybe it is the retail investors that tip that. As you know I've been selling puts on Dividend Aristocrats for years now. This is not a rule, but far more often than not, I'll sell a put at a strike price where it is much higher than the call in open interest and the call gets assigned and the put expires to zero. In a bull market this has worked and in the 12 monthly expirations of each year 8 to 9 close up into expiration. The others go down into expiration and then result in assignment of the puts. Those are the lucky months I get assigned shares that when netting out the put premium, I more often than not get a net purchase price that results in a below market price and a higher dividend yield. I'd note that the market maker knows where he has to drive the price down to, to create a selloff by the retail investor. From that I've seen some patterns. 1) when the yield on the dividend reaches 7%, dividend ETFs and mutual funds come into the options market or direct buy the shares. This provides a buoyancy in the underlying stock share price. When I see 20 contracts fill on my put sell order and the real time contract trade volume clicks up 22 or 23, I know I've found the tickle zone where the MM is saying that's a good market price and I'll piggyback on it. This February expiration was a down into expiration. What I saw in stocks I sell puts on is: prices of calls had an inordinately high open interest in call strike prices that were below the current price before expiration. I surmise from that imbalance that the corrective wave would extend longer than the usual Monday Tuesday post option expiration adjustment period. In short the boys need more fear to recover (at a discount) the inventory reduction that a high number of call assignment reduced their inventory of shares to trade and/or create(like only a specialist can legally do). I think this unusual imbalance occurred with a Trump election win and it drove prices up more than MM could contain. Subsequently we now have a sell off with lots of negative news. It just has taken longer for MM to recover their inventory (at a discount). SOX wais in bottom spotter all last week. DOW CLX has just reversed Thursday and Friday. BOTH days I sold a lot of put contrats and i hope everyone of them are assigned, but I REALLY DO NOT EXPECT IT. I believe we will see a nice recovery next week. Wave1 of 3 of a 5 wave up started on Thursday. That's where my money is and yes I'm talking my book. <smile> If we get a dip on Monday, it will be a gift. ALL IMHO Bob

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