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

To: 4rthofjuly007 who wrote (36471)	3/3/2002 5:55:12 PM
From: mishedlo	Read Replies (1) \| Respond to of 99280

No unfortunately. My GUESS is Max pain did not work in FEB MAR APR SEPT OCT and possibly NOV of last year. (The interesting thing about NOV was that the big individual stocks hit Max pain but I was not following the QQQ options at that time so I do not know. It is possible that QQQ max pain was reached on that expiry dip in NOV, from which we did a QQQ moon launch.) Thus I am guessing Max Pain did not work 5-6 months which is hardly a ringing success, for those that want to be critical. 50% someone can say is a coin flip. However, As I have stated the trick is knowing when to use it. This is something I believe I have gotten better at. In any event, I believe it pays to pay attention to what it is. I was very cautions and afraid to short last week in fear of that rally. My guess is max pain worked well last all last summer as we just chopped around. The other factor I can not evaluate is whether or not we "touched" max pain at some point in expiry week on any of those months where I presumed failure, allowing an easy delta hedge at the last minute before continuing/starting a big move. Thus If I had actual data, using my revised definition of success, perhaps there were more successes than I think. More that likely, however, the success rate last year was 40-50%. Max Pain works best when we are drifting sideways or up or down in a choppy action. It does not work well in strong trends. We have been chopping since DEC, and it has worked well since then. M