The OEX... gasp! Message Board

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Strategies & Market Trends : The OEX... gasp!

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To: William H Huebl who wrote (530)	2/13/1997 8:28:00 AM
From: Patrick Slevin	of 658

I was looking for the market to retest lows from earlier this week. I will be holding puts until tomorrow, but the momentum is solidly up right now. I worry about that because I think it sets us up for a big selloff downstream. "Trading the wings" ....looking at a Bell curve, at any given point most of the action in the market is within 1 sigma. Anything past 2 sigma is "on the wings" (the analogy is from a butterfly). Large trading groups make pin money by spreading the wings (selling spread positions) because of the statistical slim chance of getting hit. Even if they get hit on one wing they profit on the other. Often they win on both. I don't know what MSWIN is....It seems short-term as if one could make money on any blue-chip in this rally. But Premiums are fading. So I'd be careful.

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