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Technology Stocks : BAY Ntwks (under House)

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To: Anthony Ho who wrote (6023)5/23/1998 12:34:00 AM
From: Ben Antanaitis  Read Replies (1) of 6980
 
There is a theory that the volume and strike prices of the open interest of a stock (the options) might cause the stock's price to close, on expiry day, at a point where the most options expire worthless. This is called the point of Maximum Pain. I have plotted and tracked the Max-Pain point for various tech stocks over the past several months.
The graphs of the results are posted at pipeline.com in the Options Analysis section.
There is a link to a worked out example that explains the technique.

I added BAY to the study and the early look at the June'98 options are presented.

Ben A.
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