Options for Newbies -(Help Me Obi-Wan-Kenobe) Message Board

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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe)

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To: Pavel who wrote (778)	3/17/1998 6:46:00 PM
From: Madpinto	Read Replies (3) of 2241

I would like to know how to estimate a selling pressure on a particular stock (let's say 2 days) before the option expiration Friday Many things can change the scenario in days leading up to expiration. The options owners/sellers may already be holding stock against the position or they may "roll" the option into the next month. If open interest stays about the same, you can guess the majority of in the money options will put pressure on the stock. Subtract the ITM puts from the ITM calls and multiply by 100. This number may give you an idea of how much stock may be for sale. Certainly there is no guarantee. Also, compare this amount of stock to the average daily volume. Some stocks can absorb the additional volume more easily than others.

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