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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (32976)	10/15/2000 4:00:05 PM
From: Dan Duchardt	Read Replies (3) \| Respond to of 42787

Don, I verified the QQQ MaxPain calculation, entering all the open interest data into Excel and calculating the dollar value of the open contracts. 84 is the correct number, but if you look at the chart created at the web calculator you can see how shallow the minimum is at 84. Those numbers in the charts are dollars (very close to my results), so closing at 80 instead of 84 means the option writers will "lose" about $11M compared to a close at 84. I think OX is right in observing that individual stocks are more likely to respond to MaxPain. My impression is there is a lot more money on the line for those than for the index. For example, CSCO all by itself has a $20M difference if it closes 5 points away from MaxPain, INTC about $15M. The big stocks in the NDX will most likely push the index to wherever it may settle. It might be interesting to get MaxPain on all the NDX components and use that to predict closing price on QQQ. One would guess that the sentiment of QQQ option buyers would closely track that of the individual stocks, so the predicted point would be the MaxPain for QQQ, but who knows. A divergence might be interesting. I can't extract the data in an automated way, so I wont be doing it. Dan