Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Kayaker who wrote (15497)	12/21/2001 4:15:39 PM
From: sylvester80	Respond to of 99280

In other words the max pain theory sucks? :-)

To: Kayaker who wrote (15497)	12/21/2001 4:46:29 PM
From: mishedlo	Read Replies (1) \| Respond to of 99280

Kayaker - I prefer the eyeball method and it did better. CSCO INTC AMAT PMCS bang on. It took a hell of a rally to get PMCS there. MSFT over but it is almost always over by 2-3 points. Do not know why. As for JNPR. I see tossup between 22.5 and 20 so lets give JNPR the benefit of the doubt. Also note that I called for an up day as we overshot pain by a tad. As for being "under" on those stocks, I believe if you look you will see far more calls got toasted than PUTs closed in the money (even if pain was technically higher). QCOM seemed for whatever reason to be headed to 50 on the noze. Low an behold QCOM closes right at 50. I contend that 50 is indeed max pain regardless of what IQAUTO (or my eyeball method said). 50 on the nose is just too perfect a number to hit exactly, for 50 to not have been pain. In fact if one considers options from 50-70 74979 CALL options expired worthless 00000 CALL options expired in the money 07781 PUT options expired worthless 19481 PUT options closed in the money Furthermore the difference between 55 and 50 for max pain on QCOM was TRIVIAL! at the IQUATO (and my eyeball method point of 55) a mere 2506 additional PUT contracts closed in the money on reaching 50 vs 55. You simply can not say PAIN did not work. I should have commented on this slight difference when I was doing my predictions. Obviously I rushed on this one and never re-checked. At this difference pain at 50 or 55 was a complete tossup. an additional 2506 puts in the money out of 82760 worthless calls/puts is trivial. Max pain was totally on the money this month. A fine achievemnet for the crooks. M

To: Kayaker who wrote (15497)	12/21/2001 5:13:32 PM
From: mishedlo	Respond to of 99280

Kayaker - Attempting to use max pain on thinly optioned issues is useless. The one farthest off, EMLX had a mere 13,000 or so combined puts and calls in the 30-40 range. Too thin to really put a figure to. Compare that to the 80,000+ QCOM options that expired worthless. Do not use EMLX as an example of max pain failing to work. If QQQ INTC CSCO hit close on pain, the option pigs are damn happy. Add in another 80,000+ for QCOM and who cares about EMLX. Lets look at INTC 134,330 contracts at just the 35 and 32.50 strike expire worthless! I really should have loaded up the boat with strike 35 JAN puts when it hit 34+. An easy double. Bail on a breach of 35. 17,321 DEC 32.5 INTC puts closed worthless 4633 DEC 35 puts closed in the money. What a racket! All the other calls on INTC that closed in the money, below 32.5 were hedged long, long ago. They fried the jonny come lately call buyers and there were few jonny come lately put buyers. A sign of a top. So now we get do try this again next month. M

To: Kayaker who wrote (15497)	1/18/2002 6:13:21 PM
From: Kayaker	Read Replies (2) \| Respond to of 99280

Here are some numbers calculated today (closing prices) for the January expiration (today) from the "Maximum-Pain Theory (MPT) Options analysis". 'MPT Value' below is the Maximum-Pain Theory Options value calculated from the site, i.e, where the stock price should end up today if the theory is valid. Few of the stocks below closed anywhere near their 'MaxPain' value. Most didn't close near ANY strike price. IMHO any closing prices close to the MaxPain value are easily explained by the fact that most near term options purchased are those with a strike price close to the stock price. Conspiracy theorists, please refer to Occam's Razor pespmc1.vub.ac.be iqauto.com Stock Closing Price MPT Value QCOM 44.95 50 JNPR 17.00 20 EMLX 42.82 30 BRCD 35.36 30 BRCM 48.52 45 QLGC 51.74 50 AMAT 40.35 40 NTAP 18.34 20 MSFT 66.10 70 INTC 33.48 30