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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (4652)	11/11/2001 12:15:01 AM
From: mishedlo	Read Replies (2) \| Respond to of 99280

I want to caution everyone here about reliance on Maximum Pain. Although I have seen RMBS in past years close right on it for months in a row, it works best in a trendless market, on heavily optioned stocks, and it sure does not work in face of news, the middle of market plunges or the middle of strong advances. The reason I use it, is as a tool to decide entry points. One should not make trades based solely on Max pain. That said, I was thinking of shorting RFMD when it was at 20, and noticed pain was at 25 by my eyeball method. I decided not to. Check out the strike 25 Nov PUTs. quote.cboe.com As for BRCM, I would suggest 40 but the clustering of options at many many differnet prices makes this one very tough. Compare quote.cboe.com with RFMD above. I was surprised to find more bets against RFMD at any one price than any one strike on BRCM. Perhaps RFMD will collapse right after expiry. QCOM is easy. Tons of calls at 55 acting as a block. Tons of puts at 50 acting as a block on the downside. quote.cboe.com I would suggest that limitation are the upside are more restrictive. QCOM falling below 50 if far easier than a break above 55, based on my analysis. Again one does not know the full story. That huge group of calls at 55. Were those covered calls? If so the option boys hold them and have every reason to push QCOM above 55. In general, I would suspect that most of these options are not covered calls, and QCOM will drift around between 50 and 55 with a bias towards 50. M