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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (11575)	9/20/1999 10:29:00 PM
From: Casaubon	Read Replies (1) \| Respond to of 14162

Dan, I'm pretty sure the high OI you are seeing in 10's and 12.5's will cap any market advances. Think about it; those strike prices represent the price somebody is willing to sell the stock at. So, if you see a comparitively heavily weighted OI for a particular strike and month, usually the stock price will not rocket past that price. In other words, I use the options extreme OI as contrarian indicators. It works for the puts as well, except here the large put OI serves to place a floor on any declines. Having said that, I will state that I was looking for this move to the upside since about 3 weeks ago (I bought Shelleys' Sep 7.5's <gggg>). I only pulled in a bengy (damn market makers are thieves I tell ya <ggg>). I wish I wasn't trying to be so precise with my TA, or I would have purchased longer term calls and enjoyed this ride up. PS I sold the day before expiry. I didn't want to hold into triple witching expiration. PPS This thread continues to be top notch. The very best SI has to offer! Keep up the great work!