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I agree that the very act of hedging by option market makers feeds back into stock prices in various ways, and an astute trader may even be able to profit from this. But I think it will be a lot trickier than the max pain analysis.

NDX is certainly looking bubblish. It goes up relentlessly with hardly a correction, and is now at a level not seen since December 2000. Apparently i-pads, downloading movies over the internet, and making restaurant reservations over the internet now trump the mortgage crisis, 10%...

I agree. The max pain charts only make sense if you assume all the options are unhedged, which is nonsense. A market maker doesn't necessarily lose money on a short ITM option if he hedged it properly.

So what? The telegraph, telephone, radio, television, and internet weren't invented then either. Are you saying that the first amendment shouldn't apply to those media, just because the founding fathers didn't have them in mind when they wrote the Bill of Rights? The purpose of the second...

The perp's mom is Jewish. His other favorite book was The Communist Manifesto. The left is having a field day blaming the shooting on every right wing source they hate rather on the guy who actually did it.

Because it's vega positive, and if the underlying goes too far up or down gamma starts eating your lunch. There's no reason to believe that the market is biased to favor sellers.

It looks to me like Mr. 50 cent is asking for an SEC indictment. But that will be small beer compared to the legal trouble rappers usually get into. Got to keep it real, after all.

The result of paying for everything by printing more money is hyperinflation. I regard that as equivalent to default and bankruptcy.

Just how is military supremacy going to save us from bankruptcy? Is your grand plan to invade a bunch of other countries and steal all their stuff? Good luck with that -- we can't even pacify Afghanistan. The truth is that our military empire is a major part of what is bankrupting us, as Ron...

You're the fool who wants to be impoverished in your old age. Gradual, steady deflation is a good thing. I never heard anybody complain that computer prices got cheaper decade after decade. Why should I want food and energy to get more expensive? None of this has any bearing on whether...

How are they going to be able to retire? Only government employees get defined benefit pensions. Those prudent enough to save up in 401ks saw them get wiped out in 2001, again in 2008, and have basically tread water for 10 years. Most Americans in their 50s have less than $100,000 saved up...

Only fools trust the Gubmint. (Those same fools are the ones buying long term Treasury bonds at 4%.) I can't speak for the person you were responding to, but when I first bought gold I don't think there were any gold ETFs. Anyhow, there's something to be said for an asset you can put in your...

It's amazing how Presidents get credit and blame for things that they had nothing to do with. Obama happened to get inaugurated when the stock market was at an extreme bottom. It was bound to bounce up. Obama could have been replaced by Elmer Fudd, Hugo Chavez, Mussolini, or Bozo the Clown...

Nope. If you have enough cash so that you don't get a margin call upon assignment of your puts, there's nothing you have to do. There is a brokerage commission cost for the assignment.

If IV was high that was because there was an expectation of a large move up or down after earnings. If that in fact happens, your short straddle can still lose money despite the collapse in IV. It is not easy at all to make money on earnings. You have to be smarter than the MM.

Of course that is the only reason why rates are as low as they are. If he keeps it up, we will eventually have hyperinflation.

Just how long do you think there will be fools who will lend to a bankrupt government at 4%?

Yup. It also shows how if you want to trade like Soros, you have to as rich as Soros. How many of us could lose $3 billion and still be one of the world's richest people?

I figure that just about cancels out the money handed out to left wing politicians and organizations by George Soros, and the mioney handed to the Democratic Party by Goldman Sachs. One group that will never be represented by congress: The American middle class.

The paradox you reference makes use of a dependence between the two games that is due to the probabilities of one of the games being based on the capital you have. You probably won't find very many real world prices whose motion is dependent upon the size of your trading capital, particularly...