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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (62478)	1/1/2003 4:23:42 PM
From: exp	Read Replies (1) \| Respond to of 209892

MISH, I don't fully agree with your analysis. Here is why. Take INTC and look at CBOE data and iqAuto Max Pain: quote.cboe.com iqauto.com INTC=15.57 Payout if INTC=17.5 Strike Calls OI Puts OI at expiration 10 2K 7.5 12.5 4K 5 15 37K 2.5 17.5 = Max Pain 20 41K 2.5 22.5 7K 5 25 20K 7.5 These are the only data used to compute total payout at 17.5 and you can see that put holders will get more than call holders. That's why INTC Max Pain is above 17.5 at perhaps 18 or so. While you are right that huge call blocks at 20 and above likely mean INTC will never reach 20 before expiration, INTC is still at least 18-15.57=2.43 or 15% BELOW Max Pain about 2 weeks before expiration. So, do you bet on much more down for INTC or perhaps a reasonable up in the next two weeks? The same analysis applies to MSFT, CSCO, and SOX. QQQ at 24.37 however is only about 1 below Max Pain of 25-25.5.