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Pastimes : Ask Mohan about the Market
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To: Mark Ivan who wrote (17776)4/29/1999 8:14:00 AM
From: Cynic 2005  Read Replies (1) of 18056
 
Some one asked me the same Q in a PM afew days ago. Here is what I said:
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OEX options (apparently on low volume) represent institutional purchases and equity options are dominated by individuals. Both are, in general, contrary indicators. One can make a case of extremely bullish market based on OEX P/C ratio and somewhat bearish case based on equity P/C ratio. Since this is a 10 day MA, we may already have reversed the trend. I will check the numbers for the last 3 days.
That is "traditional" stuff.

Now, I can see the set-up to be picture perfect for "sell-to-whom" scenario. Some of the OEX puts bought by the institutions, often are sold unhedged - especially the ones that are sold after knowing the OEX P/C ratio is trending higher as they think it is free money (or so I read some where.) These are the folks that could make life interesting with dynamic hedging as the market falls.

BWTFDIK? -g-

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