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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Grandk who wrote (79747)	3/15/2008 12:43:40 PM
From: Real Man	Read Replies (1) \| Respond to of 94695

Normally, yes, a rally due to excessive March put options being in the money. As traders take profits, the ARBs buy futures and the markets rally. In rare cases when the markets are DOWN enormously, 1987 scenario unfolds - as the markets crash through OOM put strikes, the ARBs are forced to hedge by selling futures. Risk is both ways this week, and it's hard to tell. However, dumb Fed is enormously DRAINING liquidity in the system for end of March TAF launch, which, in turn, may cause sharply increased volatility. This is NOT good for return to equillibrium expiration bet, so the other bet has higher probability than it normally would, solely due to this action.