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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (14022)	11/7/2002 3:56:35 AM
From: Michael	Read Replies (2) \| Respond to of 30712

Mishedlo, re: is it normal for open interest on heavily traded ITM calls to drop by 25% in two days? it appears that QQQ Nov 24 calls are disappearing by the truckload, about 35k in all I did not notice that but that is bearish IMO. That says the smart $ are cashing out those calls. Need some help here. I obviously have something back to front here, but it seems to me those dissappearing calls could have a bullish interpretation if my understanding is correct. My reasoning is this. Calls can only dissappear if the people who originally wrote them buy them back. i.e if you had originally sold them to me, who then sold them to somebody else, they would still remain in the open interest. However if you bought them back from me then they would "disappear". Is that correct ? Assuming it is, then why would the writer buy them back if they anticipated a market decline. It would seem to me that they would only repurchase them to protect themselves against the liklihood of them becoming even further in the money by Opex. If that was correct then the implication would be bullish, no ? I have only a basic understanding of options so I amd sure I am missing something basic. i would appreciate it if you could explain. thanks Michael