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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: tekboy who wrote (119)	4/21/2001 10:47:58 PM
From: JGoren	Read Replies (2) \| Respond to of 5205

max pain is the concept that most options expire worthless. the market makers will attempt to move the stock price down to that point where the maximum amount of options will expire worthless, thereby causing max pain on the holders. look at it another way, as supply and demand, of those who bought and sold options at various strike prices, there is an equilibrium that creates its own momentum as to the underlying stock price on options expiration day i have actually seen the price on expiration day hover around 62 and then right before 4:00 dip and close at 59.86, just enuf to be a little more than 1/8 below 60 and knock out the 60's.