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

To: ajtj99 who wrote (63899)	5/8/2002 1:51:39 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 99280

Hey, don't make me a "believer" in Max pain, I am not, two years ago on the Steve Channel I discussed once at length the type of circumstances when it works and when it does not work. I use it when I think it will work, but that is not even a 50% chance with the volatile issues I am dealing with in my trading forays. Zeev In edit, and now, took a buck off CDWC out here at $53.83. In reedit, also took off INVN here at $21.64, another $.34, somehow, the volatility has evaporated on that one, maybe the silence before the storm...

To: ajtj99 who wrote (63899)	5/8/2002 2:03:58 PM
From: Carl R.	Read Replies (1) \| Respond to of 99280

While thinking about Max Pain in terms of market maker manipulation is a useful memory device, it actually has nothing to do with the underlying cause. Professional option writers dynamically hedge their positions so that they make money regardless of the behavior of the stock, except in the case of large gaps. As expiration approaches, they have to unwind their positions to stay properly hedged. It is this unwinding that is the primary cause of the move in the stock, not any insidious manipulation, though moves in the last few minutes could be manipulated. Carl