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To: Rob Preuss who wrote (1074)9/14/2000 6:02:53 PM
From: Czechsinthemail  Respond to of 1762
 
Rob,

The simplified explanation of options behavior is that there is a certain tendency for options to gravitate toward strike prices around expiration. Though many believe the major reason for that is manipulation by option writers so that the options expire worthless, I think the main reason for the phenomenon is actually position hedging.

In any case, option expiration activity would suggest prices around 17.50, 20, 22.50 or 25 at expiration. However, unless there are large option positions, this is likely to be a very small influence, particularly given the trading volume today.



To: Rob Preuss who wrote (1074)9/14/2000 6:06:37 PM
From: Shankar Kumar  Read Replies (1) | Respond to of 1762
 
Let me take a stab at this. If some entity has a huge put position with strike price $20 or shorted a lot of calls
then this entity (typically with deep pockets!) would try to keep the price under 20 so as not to lose too much money.
Does this sound logical?! Sk.


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