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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Harold Engstrom who wrote (960)	4/17/2000 9:22:00 AM
From: Biomaven	Respond to of 52153

Harold, Never understood why call or put volume is indicative of anything: for every buyer betting one way, there is a seller betting the other way. Can anyone enlighten this options neophyte? The person betting the "other way" is almost invariably the options market maker. For high call volume, it isn't always clear if the investor is bullish or bearish, as a lot of individuals write covered calls. Not many individuals write naked puts, however, so high put volume indicates bearish investor sentiment. Thus changes in the put/call ratio of probably do reflect individual investor sentiment. As to whether having individual investors pessimistic or optimistic is a good indication of where the market is heading is quite unclear to me. I've heard said that high levels of pessimism mark bottoms and high levels of optimism mark tops - if this is correct, high ratios are a contrary indicator. (Except when they're not of course <g>). Peter Peter