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.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: umbro who wrote (13158)	8/10/1998 11:44:00 PM
From: DLS	Read Replies (1) \| Respond to of 164684

Does Max Pain also take into account the price paid for the options at the various strike prices? Seems like it would be valuable to know for instance, in addition to the open interest at the various strike prices, at what average cost were the options at those prices actually purchased. Really no need for a detailed reply, unless it is convenient for you to do so. Thank you. dls

To: umbro who wrote (13158)	8/11/1998 9:43:00 AM
From: Ben Antanaitis	Respond to of 164684

Gary, RE: Max-Pain doesn't seem to move too quickly. It's not a bug in the calculations. It is a behavior based on the built-in 'inertia' of having positions built-up in the OI, and that normally there aren't huge shifts in the distribution of OI over the strike price spectrum during the last month of the contract life. Quick changes in the OI distribution don't normally happen. In fact, it took heavy OI action this month to move SUNW's,INTC's and the XAU index's Max-Pain point by one strike price during the course of the month. Typically, it isn't the Max-Pain point that moves to the stock price, it's vice versa. That's the nub of what I'm trying to determine, can one get a handle on the stock price action at expiry day, based on taking a look at the Max-Pain data during the last month of contract life? As a side thought, one could use the divergence of the stock price from the Max-Pain point as a proxy for the volatility of a stock. Ben A. (Originator of Max-Pain) ez-pnf.com