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: mishedlo who wrote (60094)	5/1/2002 7:07:39 PM
From: The Freep	Read Replies (1) \| Respond to of 99280

<<Now, if CSCO fails max pain badly this month, the people will see a "max pain failure" when I will suggest we do not understand the true nature of the puts.>> But Mish -- we never understand the true nature of the puts OR calls, so any "max pain failure" can be rationalized by the above logic. Now, don't get me wrong: I think knowing not only the ownership of puts and calls but also the cost basis of the puts/calls (I.E. a lot of QQQ calls from 33 and up will likely not be "in the money" for the owners unless the QQQ rallies over, say, 34-35 based on how much the calls initially cost) would make max pain much more reliable. But we don't know that, so we gotta take our best guess, which you do quite successfully. Still, since we don't have that info, a failure is a failure in the max-pain system -- unless you can come up with a quantitative way to account for anomolies. the freep