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 : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: dennis michael patterson who wrote (33292)	3/27/2002 3:09:08 PM
From: velociraptor_	Read Replies (2) \| Respond to of 52237

It does, but sentiment indicators are a pretty poor tool for exact timing. P/C ratios in general are poor indicators because there are flaws in the way the number is reported. It is a very simple ratio of Puts over Calls, but there is so much more underneath that it doesn't reveal which is necessary to know. There is no dollar weighted adjustment made on this number. It will make a big difference when the P/C ratio is 0.5 but underneath someone bought 1 Put for 5.0 and 2 Calls for 0.50 each, or someone bought 1 Put for 0.50 and 2 Calls for 5.00 each. One is a hedge and the other is more likely a trade. There is also no consideration given to open interest or to which strike and expiration months those Puts and Calls are being bought for.