Hi Monty; RE there are lies being played out in the market,
the key is to recognize them and know when to get out
before all the other participants recognize them.
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and
it was Soros that made that statement and from what
I hear he didn't figure out one of them in time or he
would not have lost 2+ Billion recently.
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I reckon they float so many they try to recognize when the herd
will catch on to the one they are telling and jump out just
ahead of that, but then they get messed up at times because the
competition tells a bigger one.
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The head SEC man is suppose to talk tonight..and tell us just how
honest the market is. <G>
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I'm getting into a new kick, the max pain kick,
It's not my idea , but the guy who turned me onto it don't
track the stocks I wanta track,
The 4 top Naz100, and 4 top NYSE market Caps.
Then the SPX options. With that I think we might get another
indicator. The idea is that most options expire worthless,
and that's true. Also that as ex-date draws near stocks tend
to move towards the point were the most money will be lost
by the option buyers.
So doing the top 8 stocks , and the spx and getting a mean average
we should come up with an indicator. The idea here is to use the
options as an indicator, ( this meets my requirements on strategy
as being the key way to play )
This will take some work, and I haven't tested it yet but I feel
it's worth a look.
An example In a simple form would be like msft
strike call-OI put-OI $total
105 20 400 $44100
110 50 300 $38500 < the most pain is here
115 100 250 $40250 or between the two.
120 400 20 $50400
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I know this don't play out on every stock, as I have checked
it that far. But it works more often than not, so if you sum
up the Big Super caps and toss in the SPX it should work
as an indicator, as long as you only count on it when the
results show a sizable difference from the actual price.
The writers of options by and large are smarter than the buyers,
( with a few exceptions ), I have to add that , because I'm sure
every buyer thinks they are one of the exceptions, other wise
they wouldn't be buying. and I don't want every option buyer
trying to roast me at the stake.
Just the same the big picture shows with out a doubt more money
goes into the hands of the writers than the buyers.
Well that's not all together true, actually I think the most
money winds up in the hands of the Specialist and brokers,
but that's beside the point and isn't relative to using
the option OI as an indicator for the most pain point.
Jim |
