Strong bounce today

If this thing doesn't get some major injection by EOD, the way I calculate it, option writers are going to be paying the bears close to a bil on just spyders by tommorrow. Multiply that out by the universe of stocks underwater relative to max pain pts. and that's an immense payout.
Never thought I'd see the day bears take option writers to the woodshed.

<img src="http://elitetrader.com/vb/attachment.php?s=&postid=1570232" border="0" alt=""><br /></font></p></font></p>
 

Attachments

whew...

<img src="http://www1.istockphoto.com/file_thumbview_approve/872272/2/istockphoto_872272_hand_squeezing_orange.jpg" border="0" alt=""><br /></font></p></font></p>
 
Quote from dtrader98:

If this thing doesn't get some major injection by EOD, the way I calculate it, option writers are going to be paying the bears close to a bil on just spyders by tommorrow. Multiply that out by the universe of stocks underwater relative to max pain pts. and that's an immense payout.
Never thought I'd see the day bears take option writers to the woodshed.

<img src="http://elitetrader.com/vb/attachment.php?s=&postid=1570232" border="0" alt=""><br /></font></p></font></p>
More...

A very astute observation dtrader98, it's a pleasure to learn that not every ET poster is an utter fool. I too noticed the 120,000 contracts at S&P 1400, and of course we have mentioned the support near the 1375 swing-low ad nauseum and another spike in open interest there. Todays rebound was rather startling, but when you consider the amount of short interest on top of the heavy open interest at 1400, I suppose not that surprising afterall. I can't wait to see exactly where the S&P settles. Monday should be interesting. I anticipate another leg down into the 12ish area but have no idea when it might get underway. In the meantime, with the VIX breaking above 30 it's been great trading.
 
Indeed there is mass injection this afternoon, and SPX closes above 1400. But seems the open interests of in-the-money puts aggregated are still huge enough to break many hedge funds, unless market makes a dramatic rally tomorrow, which I think unlikely.

Quote from dtrader98:

If this thing doesn't get some major injection by EOD, the way I calculate it, option writers are going to be paying the bears close to a bil on just spyders by tommorrow. Multiply that out by the universe of stocks underwater relative to max pain pts. and that's an immense payout.
Never thought I'd see the day bears take option writers to the woodshed.

<img src="http://elitetrader.com/vb/attachment.php?s=&postid=1570232" border="0" alt=""><br /></font></p></font></p>
More...
 
Quote from piezoe:

A very astute observation dtrader98, it's a pleasure to learn that not every ET poster is an utter fool. I too noticed the 120,000 contracts at S&P 1400, and of course we have mentioned the support near the 1375 swing-low ad nauseum and another spike in open interest there. Todays rebound was rather startling, but when you consider the amount of short interest on top of the heavy open interest at 1400, I suppose not that surprising afterall. I can't wait to see exactly where the S&P settles. Monday should be interesting. I anticipate another leg down into the 12ish area but have no idea when it might get underway. In the meantime, with the VIX breaking above 30 it's been great trading.
More...

Thanks piezoe. Watching the last few days unfold has been pretty surreal.
Good to see the market likes to keep us on our toes.

Poohbear, I calculated (SPY) max pain at about 148 today. About a 6 dollar spread (5.50 AH), but not as bad as it would have been had the market had some kind of catastrophic 87 style drop.
But, I agree, that's going to be a lot of inertia to overcome in one day and I'm sure there are going to be some hedge funds taken under before this all unravels.
 
You must log in or register to reply here.
Back
Top