Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Jim's Nasdaq100 Special as a basket. -- Ignore unavailable to you. Want to Upgrade?

To: Matthew L. Jones who wrote (1333)	10/13/1999 6:54:00 PM
From: OX	Read Replies (1) \| Respond to of 2103

hi Matt, I thot I've answered parts of your Q for you before? Or am I confused and you are asking a diff Q? see the tail end of this post... Message 11502726 more specifically for QQQ, I've only been tracking QQQ/NDX for 2 months, so I have no history for maxpain on it past that. for the last 2 expirations, NDX maxpain has been close enough to call it on-the-money. but that doesn't mean it leads the index. The index maxpain is not a combination of the individual issues' maxpains... altho that's an interesting idea. I could probably do that relatively easily: maybe 15-30 minutes worth of effort, but I doubt it would yield anything worthwhile. I'll have to think about it a bit before I invest the time. thanks for the idea.

To: Matthew L. Jones who wrote (1333)	10/17/1999 12:17:00 AM
From: James F. Hopkins	Read Replies (2) \| Respond to of 2103

Matt & All; About MAX PAIN and more than you likely want to know . QQQ options don't trade enough the thing I found where the BIG money is, where to look is MSFT, INTC, DELL, CSCO, SUNW, AMZN..like that and do a composite on them they will over ride the qqq options. MAX PAIN is not one of my ideas but I was quick to see it has power and my hats off the guy who started it. ---------------- That said there are several ways to look at it.. But the very best one to catch is when it's violated in other words when it goes the opposite way..and say the calls OR puts make tons of money when you catch that at expiration you have a sure bet staring you in the face for right after It's early part of the next set that is told by the current expiration. 1 If options expire with calls making a ton of money the market will sell off right after. 2 If Puts make a ton the market will rally. ---------------- It's not real strong but the calls made money this ex so I see some more sell off in a day or so. ---------------- The second thing I look at is that they do tend to move towards max pain , but there are times that's violated and when it is and if it's a lot you sure want to catch the next mouth. Calls big profit= sell off Puts big profit = rally ------------ Think about it , them who came in the money buying calls don't really want the damm stock , they want the profit. Those who came in the money buying puts, cause the losers to have to buy stock. ----------- Sunw should pull back in a day or so..lots of calls made money. QQQ may have a little bounce but I see some more down side even if it does at least short term. But Don't short Dell or MSFT , while they may go down some, by max pain it's not worth the risk. BTW the dollar price of max, ie= where max pain is not all I look at . The amount of OI on that side is often more important If you look at the slop of max pain on SUNW while it was at pain 80 and closed at 92 , there were not a ton of people who made money..had that call slope been steeper it would equal a lot more contracts. Then look at amzn pain 65 closed 75..less of a gap above the pain by 2pts ..but the slope is better, however neither one has enough slope to get real excited about. To make it more to the point look at IOM.. pain was $5 closed at 3 3/8 ..lots of percentage there BUT the amount of put winners don't amount to a hill of beans the put slope is next to nothing. ------------------------- Micro analyzing them and the slope can yield even more info ( the charts are great but the scale on the left is hard to guess at.) For academic purposes only lets take first Sunw and compare it to AMZN..for max pain violation. Sunw the point on close call side ay 92-9/16 seems to be 90M $ the put side is subtracted at 50M $ = 40 million $ of stock to be sold "market cap of sunw =72.25 ) so we have 40 to 72.25 ------------ Amzn is amounts to about 15 mil $ of stock to be sold doing the same thing, and that is 15mil $ to 25.31 market cap ---------- 40 to 72.5 is to 15 25.31 as 1.8 is to 1.68 Amzn has a .12 = 6% more downside risk than sunw due to the amount of calls that made money. Even though sunw violated the max pain by $12 and Amzn by only $10 , amzn is still the better short, due to the total OI amount of $ winners relative to market cap. ---------------- This may not be said real clear..but think about it good before you hit me with a ton of questions, and remember I just did an eyeball guess on the curves and put it out for academic reasons to show the principle I don't claim the numbers are correct. Last to be more specific on the EX date winners/losers bring up the option chain and just do that month counting the amount of OI left that's in the money on both sides and get the difference. Like I see 2.2 M shares of CSCO going up for sale Monday or some time next week just due to last months call winners. She has such a big float I don't know how much that can hurt her if at all, but it sure won't help her. I haven't done the nitty gritty on any others yet, and need to size them up in relation to one another as I will likely short one with the most to sell in a ratio to it's float. Jim Max Pain Ref ez-pnf.com Option chain url edreyfus.com