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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (7420)	6/2/2004 5:36:19 PM
From: yard_man	Respond to of 116555

I still think that you have cause/effect reversed on that -- options OI is a reflection of the behavior of the markets, imo -- not the market a reflection of prior bets placed in the options markets -- it may well be that most who own those puts would prefer they make zero out of them -- as the market moves, folks hedge -- after an extended rise where do you expect the money to stack up, Mish. I don't know when we get a significant selloff -- but when we do, let's go back and see how lop-sided things are right before -- Markets trend and hedging reflects the direction of the trend for the most part ... the fact that markets do trend means that options with the highest OI tend to go out 00 -- because that is the trend. If it were as you say, then it would be so easy to simply check the OI and bet accordingly and almost never suffer a loss -- it isn't that easy.