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: HairBall who wrote (57784)	11/19/1998 8:42:00 AM
From: Patrick Slevin	Respond to of 58727

I guess it's Lone Star. I'm at DFW for a weekend trading seminar. What I was thinking about was that there was a hypothesis that the Specialists were net long and therefore sold ahead of the AG news. What I am saying is that the hypothesis is purely speculation due to the fact that one cannot tell the Spec's position. Evidently, if the COT report is so dated. Pragmatically, then, I'm more prone to weight that situation the same way in hindsight as I speculated the other day. The market was kept below the gap down Open to limit shorting opportunities, the longs were shook out with a rapid stop run down close to Monday's lows, and then it was quickly brought halfway back up. All this seems like it could easily be accomplished in a thin market. In any event, I'm less prone to think this is a Specialist issue...although I'm sure they know what's going on. I'm more prone to think that in a thin market this could be accomplished with well placed basket orders. If traders were to selectively sell baskets of high cap stocks simultaneously with the sale of futures contracts the market may be moved very rapidly in a thin environment. For example, the stock no longer exists but take Cap Cities. It was a high priced member of the S&P 500 several years back. To manipulate the market on the Thursday prior to expiration you might buy OEX call options at 3, 3:15 EST. Then buy baskets of Cap Cities, XON, and so forth. Cap Cities would make people look up and blink because it was like a 3 or 4 hundred dollar stock. XON, GE, Coke, Phillips and so forth made/make up a huge % of the S&P in terms of weight. So buying these selective stocks would create upward pressure on the S&P. Now, to complete the ruse the baskets would be sold MOC, the calls closed out and puts initiated. Closing the puts on the Open the next day when the market adjusts for the MOC sell order on the large cap baskets. Now that was some time ago. MOC orders now have to be in the Spec's hands 15 or 20 minutes before the close, so that may not work but it just goes to show one possible scenario. When they put that rule in about MOC orders getting there 20 minutes ahead of time, by the way, they said it was because it was unfair for the Specs to have to be deluged all at once pairing off these orders. I'm more prone to believe they were getting killed with this type of market manipulation, if one can call it that. Have a good day, I have to decide whether or not to short this thing or if the Cash will in fact run to 1180 first.