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 : Wings-FPT -- Ignore unavailable to you. Want to Upgrade?

To: OX who wrote (58)	8/17/2000 2:48:40 PM
From: Louis V. Lambrecht	Read Replies (2) \| Respond to of 124

OX - professionals Pls, professionals used in the term of the CFTC CoT cftc.gov And for the options statistics, pls check the sources at ww.cboe.com.

To: OX who wrote (58)	8/20/2000 9:20:13 PM
From: jjs_ynot	Read Replies (1) \| Respond to of 124

OX, Your comments on writers as market professionals versus buyers as retail may be migrating away from the norm, but I think that it is still likely the case. Also, a lot of options are either closed or hedged within a week of expiration. I did a statistical study of Max Pain for 10 mid cap stocks and 10 lare cap stocks with large outstanding open interest for two years. My results indicated that there is a statisticlly significant move of stocks over Max pain and stocks under max Pain to move together (price difference is reduced). Caveat: this only seemd to work well with stocks trading 2 to 4 stocks away from parity. Closer than that to parity seemed to not produce enough option pressure. Stock pricing further removed from the parity (Max-Pain) point seemed to be associated with a significant fundamental shift in the market position of the uderlying. Regards, Dave