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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Slevin who wrote (38462)	10/23/1999 6:12:00 PM
From: Matthew L. Jones	Read Replies (1) \| Respond to of 44573

The part I was particularly interested in was his comments about hedge funds unwinding positions. If you are short calls and long puts in a big way (synthetic short) the option market hedges the liquidation in the equity market by going long. Let's face it... J6P was not going short in the options market Thursday night and Friday in any major way. In fact, I don't know if anyone noticed it late yesterday, but I noticed (after 3 PM) a spike in the Put/Call ratio (indicating a major increase in put open interest). As you know, this is a very bullish sign. It is a sophisticated way of bear capitulation. In stead of selling out of your longs you go long puts and hold the longs. I can't come up with any other explanation for the sudden rush to buy puts. Maybe you can. BTW, yes, Cramer is very emotional in his writing (and his speaking for that matter), but let's not forget he's also pretty sharp and a previous hedge fund manager. I think he still has some involvement in the management of the fund now, even with the involvement in TSCM. Matt