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 : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: Shack who wrote (86127)	11/19/2003 5:20:06 PM
From: Joseph Silent	Read Replies (1) \| Respond to of 209892

The premise behind option resistance is that 90% of all options expire worthless Shack, I don't believe this is quite right. On the other hand I'm damned if I know what the truth is. There are several option-related myths (I use the term "myth" in the technical sense and not the colloquial sense) floating around. Because I've continually had trouble with historical data, I'm left with more questions than answers. A document put out by the CBOE (called "Trading Index Options - Tactics and Strategies) says, on page 18, "it is a misconception that 90% of options expire worthless. Only about 33% of options expire worthless. The rest are closed or exercised". My data, being what it is, gives a mixed message. I generally don't see noticeable changes in OI toward expiry. Also, I'm distribution-oriented and very wary of strong statements about averages. They mean little in an "options-world" that thrives on variability.