To: soup who wrote (21559 ) 12/31/1998 11:31:00 PM From: Sam Scrutchins Respond to of 213177
Soup and all, First, I apologize to Ben for posting a private message from him to all of you. I think it is important right now that we are all aware of this. Earlier on New Year's Eve, I posted the following message to Ben Antanaitis of BCASoftware:I have a question. I suspect that January options positions contain a lot of long-term hedging strategy plays. Consequently, the holders will not experience much pain when their stock is called out from under them. The same may apply to some short positions as well. Working under this assumption, don't you think that the Max Pain graph for Apple computer may understate the acutal max pain point? I would appreciate your thoughts on this. If you like, you could post the response to the Apple thread on SI. Thanks, Sam Scrutchins He replied with:This posting I placed on the DELL thread may be what you are looking for: Message 7045394 I think it is generic and applies alomost universally to all the tech stocks right now. The Dell thread post: Interesting! FWIW the current Jan'99 Max-Pain Pointâ„¢ for DELL is also $50. However, I see this as a result of lots of Jan open interest positions that were taken way early in '98 and folks who bought LEAPS a long time ago. Because so much of the open interest is 'old' and was bought when DELL was at much lower levels, I think that this month's Max-Pain Pointâ„¢ for DELL is underestimating the eventual expiry day stock price. BWDIK Ben A. I think the Max Pain Point is higher than 30. Sam P.S. If you follow the Dell post back a couple of posts, you run into some interesting valuation concepts. They probably also apply to Apple, at least from this company's perspective (VectorVest ProGraphics). If I can, I will try to find out where this pst came from.