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.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (40776)	3/24/2005 10:03:32 PM
From: ChanceIs	Respond to of 206290

"It appears spreaders are selling the April 42 and 43 puts to help finance their purchase of the XLE April 40 puts," Foster said. IOW, they sold a put spread, which in general is a bullish manoeuvre. I have never been able to make any sense to assigning any significance to the put/call ratio. I sold some OIH $90 puts today because I don't think we will get that low, and if we do, I am likely to start selling $95 or $90 calls to hedge. If I have the stock put to me, I will start selling covered calls. So basically, I am moderately bullish, and am enjoying selling the volatility. How could you have discerned my intentions by looking at the open interest which resulted from what I did or will do??? I don't think it is possible. I have no idea who bought the puts I sold. Probably a market maker. If he bought the puts, he probably bought a few shares to hedge his risk, and stay "delta neutral." He may have bought a few calls further out of the money. Who really knows? The bottom line is I have never been able to conclude anything from the put/call ratio, and I think that it is a mistake to try.