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Strategies & Market Trends : Tech Stock Options

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To: AlanH who wrote (56667)	10/29/1998 1:23:00 PM
From: SJS	Read Replies (1) of 58727

AlanH, As an option player, I wonder if you've noticed that the options will LEAD the index. I've seen many times that unless the trading systems are "guessing", which I highly doubt, the option prices hint at the direction of the index BEFORE it actually moves. Usually this is by 1/8 or 1/4 point move in the bid/ask, and seem to be reliable for a very ST duration (in other words, you can't do long range predictions from it...). Nevertheless, it's very interesting to watch this action occur. Do you think that the software programs that track the index and do the computation for it get to "look ahead" at the index components bid/ask and size on a 1 by 1 basis (not hard with a computer...) or the market in general and make probabilistic determinations from it? If you could do that, you could make big dough... Steve

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