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Technology Stocks : Extreme Networks, Inc. (EXTR) -- Ignore unavailable to you. Want to Upgrade?

To: minorejoy2000 who wrote (372)	10/19/2000 3:09:50 PM
From: TigerPaw	Read Replies (1) \| Respond to of 770

Max Pain. Max Pain is an indicator of the cumulative value of puts and calls on a stock. Puts are the option to sell a stock at a given price. Calls are the option to buy a stock at a given price. Puts and Calls have value based on the relationship between their strike price, and the actual stock price. The Max Pain point is the stock value where the greatest profit is made by sellers of options (both puts & calls), or conversely where the largest value amount of options bought will become worthless due to expiration. The Max Pain theory states that the big concerns, Brokerages, Hedge Funds, etc. are primarily option sellers instead of buyers and so will desire the stock price to approach the Max Pain point on expiration day (tomorrow). There is still lots of debate whether the big concerns have the power to manipulate a stock to the desired price, but dueling press reports like we are seeing in EXTR lend support to the idea that they try, while also unwinding their option sales. TP