3 replies to this topic

[maineman]

A few days ago I pointed out that there had been several days in a row with gaps up on the 15 and 30 minute charts. These gaps appeared mostly at the open, one late in the day. I asked if anyone knew the significance.Nobody answered. I seem to remember from my old "chart studying" days something about "continuation" gaps and "exhaustion" gaps... Well, in hindsight, I hope I recognize these in the future for what they were. Point #2... I pointed out yesterday that on the 100+ point rally off the FOMC reaction swoon, that OEX call prices actually deteriorated as price rose into the close. I wondered out loud how "odd" it was... Well, in hindsight, I hope I recognize these findings again in the future.... Exhaustion gaps.... disintegrating options premium..... so noted... mm

[MacRo]

maineman, I absolutely agree, there was a lot of abnormal options activity the past two days. OEX P:C was the highest I've ever seen it yesterday (over 3:1), and there were ostensible "mispricings" on a lot of the index options. there are a lot of things really wrong with this market. when the fed is cutting rates and the market is rallying, normally the most interest rate sensitive sectors (small caps, utilities, brokers, banks, reits, etc) shouldn't be diverging badly to the downside...

[Tor]

A few days ago I pointed out that there had been several days in a row with gaps up on the 15 and 30 minute charts. These gaps appeared mostly at the open, one late in the day. I asked if anyone knew the significance.Nobody answered. I seem to remember from my old "chart studying" days something about "continuation" gaps and "exhaustion" gaps...

Well, in hindsight, I hope I recognize these in the future for what they were.

Point #2... I pointed out yesterday that on the 100+ point rally off the FOMC reaction swoon, that OEX call prices actually deteriorated as price rose into the close. I wondered out loud how "odd" it was...

Well, in hindsight, I hope I recognize these findings again in the future....

Exhaustion gaps.... disintegrating options premium..... so noted...

mm

mm - where do you get info on opening and intra day options premia?
tia

[maineman]

Tor, when I'm trading options I keep a chart up of the bid/ask of the series I'm trading. Each month I find a few strikes that "make sense" to me and use them to trade. Nothing more sophisticated than simply watching the bid/ask. As I said earlier, I don't study true options math... I just observe and take notes. Normally there might be a few bucks worth of "time" premium in a particular strke and that will ebb and flow as the underlying index (OEX) ebbs and flows, usually in lock step. When there is an increase in anxiety, the relatiohsip may change, and the bid/ask will widen or narrow accordingly or, as noted yesterday, the ask price will dissolve mysteriously as it did in the afternoon. Case in point: after the prior good swoon, as soon as the index stopped collapsing and stabilized at support, the ask price started to expand quickly as price rose off support. This did NOT happen late yesterday.... mm