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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Slevin who wrote (16799)	2/26/1999 7:30:00 PM
From: VS	Read Replies (1) \| Respond to of 44573

Patrick, to respond to your earlier message: >But wouldn't that imply that there are people buying the puts? If you >are writing it, it's because I am buying it, no? Very true, there are always two sides to a trade. Its a question of supply and demand, though. Implied volatility can be a good proxy to gauge that. When put activity in an index series rises and IV drops at the same time, its likely that institutions and market makers are writing them. In terms of usefulness, youre right that the p/c ratio has its limitations. I wouldn't trade off the ratio alone. Its simply one sentiment indicator, and should be used as such. Vince