I have always considered OEX P/C ratio as a "smart money" indicator. In other words, when there are more puts traded than calls I have always considered it bearish. And there is some questionable statistics to back it up.
A couple of days ago I was doing a neutral trade (very simple dollar and beta neutral trade). I sold NDX puts and some diagonal put spreads vs. buying OEX puts as a protection. It was average size position resulting in trading about 5,000 OEX puts. The ideal scenario for that is either the market goes up or NDX outperforms OEX (idealy both).
So, do you consider me "smart money" or "dumb money"? I am your regular hedge fund trader.
I expected the market (NASDAQ in this case) to go higher, but I had to hedge it with OEX puts. So, do you think those OEX puts was a bearish bet?
Keep in mind that I traded just OEX puts, which are recorded in a P/C ratio. Spreads are not recorded in volume and never recorded in any ratios.
Next time you look at this indicator, think of an average hedge fund manager like me.
Denleo
OEX P/C Ratio
Started by
denleo
, Oct 07 2007 12:07 AM
3 replies to this topic
#2
ogm
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#3
maineman
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maineman
Posted 07 October 2007 - 08:25 AM
which one of those was denleo? 
#4
linrom1
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Posted 07 October 2007 - 03:42 PM
OMG, only Latin-Hispanic music is more lame than this.
This is by far more appropriate: $SAVE US
Just substitute Queen for Goldman Sachs and England for US and you got something: '70's style angst for the unfolding super-stagflation.
Edited by linrom1, 07 October 2007 - 03:49 PM.
