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 : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Nancy who wrote (29224)	11/22/1997 7:31:00 PM
From: Trey McAtee	Respond to of 58727

TO ALL--(sorry to interrupt nancy:)) just wondering if anyone is in WSTL DEC calls. also, i am really green on options, which will become clear when i write this. i tried to sell some calls i purchased, but i think i did the wrong thing. i tried to sell to close, but the trading SW returned with a confirmation to sell puts. what did i do wrong. what do i need to do to sell calls i have purchased? thanks in advance. good luck to all, trey

To: Nancy who wrote (29224)	11/23/1997 11:20:00 AM
From: Tom Trader	Read Replies (1) \| Respond to of 58727

Hi Nancy, I am not sure that I can be of much help to you in answering your questions. I have never paid much attention to open interest when it comes to options other than as an indication of liquidity -- though I know some people use it as a tool in determining the likely direction of stock prices as expiration draws near, But I shall try: >>first, open interest - does that mean both long and short together ? or a netted figure ?<< To the best of my knowledge the open interest on options, reported by financial publications, is stated cumulatively and not netted--but I don't follow the open interest in the IBD and am not sure how it is reported. >>second, when put open interest is much larger (assume this is long put) then wouldn't it be a contrary indicator ?<< Not sure--I think that the SPX and OEX options are used for hedging and therefore it is likely to cause distortions when viewed as a sentiment indicator. However the EPC ratio is viewed as a more reliable indicator of sentiment and this as you may know has shown heavy put buying ever since the sell-off gained force--and that suggests that any sell-off at least in the short-term will be limited. In fact, although I am long OEX puts as of now, recent market action --unless it was heavily impacted by options expiration activities-- does not support any significant sell-off. However, various indices are at resistance levels and hopefully, it will give me an opportunity to exit at a profit. >>But unless one knows what represents open interest, it is almost meaningless - CBOE's definition only says this is contracts remain open,( which could be long or short.)<< This is true--and as I say the SPX and OEX ratios, are viewed as less reliable than the equity ratios because of the hedging that I referred to earlier. Regards