ES Journal Archive (2011)

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Quote from ammo:

123 straddle trading at 97 cents,spy at 23,5 so worry factor is a 47 cent move, which keeps us at or under days high
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+1

Want to Thank You for this analysis.
 
Quote from JoshDance:

ammo, I wish I knew what the hell you were talking about. I need to brush up on options it seems.
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Yeah, I could use some schooling on this stuff too.

So as MM's are concerned, will they move price in order to guarantee the largest amount of options contracts will expire out of the money? If that is the case then the goal would be to push it up further, correct? Is that even the right thinking?
 
Quote from bigsnack:

Yeah, I could use some schooling on this stuff too.

So as MM's are concerned, will they move price in order to guarantee the largest amount of options contracts will expire out of the money? If that is the case then the goal would be to push it up further, correct? Is that even the right thinking?
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I think that is the general theory, yes.

One would then have to know which number that would be for the MMs.

If they don`t get the market where they want it by expiration, I believe they need to hedge their losses in the market and thus adding pressure in the other direction.

If I have understood it correctly, that is.

It seems like it is a lot of guesswork either way.
 
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