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Trading Journal - June
- Thread starter Seanote
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for those looking for swing plays on a possible multiday reversal, take a look at SBSA, USAI and RYL.
nutsneal,
I don't get your point. the atm's always have more OI.
I don't get your point. the atm's always have more OI.
Originally posted by NUTSNEAL
Take a look at June open interest in MO
Major bell curve with peak at 55 strike. I have noticed often these large companies have a major tendency toward the peak of the open interest at expiration. Also, the June 60 puts are $2.60 offer.
The most important indication is the OI in the at-the-money calls vs. puts. June is flat but there's huge gap in the July's.
Sorry I didn't make my point clear.
What I was getting at is that I have noticed that as we get close to option expiration, there is a tendency for the price of the stock to gravitate toward (and often very very very close to) the strike where the large open interest is. In the case of MO, I was getting at that this could create a GRAVITATIONAL PULL (or tendency) to hold the stock price to the $55 area!
As with any observation it certainly is not perfect. I just always try to have as much evidence in my favor as possible for any trade.
I would be interested in observations (of any kind) others have found helpful in improving their trading accuracy.
Sometimes the evidence I weigh convinces me to take a trade, but often just one additional piece of evidence convinces me to pass on a trade I might otherwise take.
Again I want to thank Seanote for this thread!!
What I was getting at is that I have noticed that as we get close to option expiration, there is a tendency for the price of the stock to gravitate toward (and often very very very close to) the strike where the large open interest is. In the case of MO, I was getting at that this could create a GRAVITATIONAL PULL (or tendency) to hold the stock price to the $55 area!
As with any observation it certainly is not perfect. I just always try to have as much evidence in my favor as possible for any trade.
I would be interested in observations (of any kind) others have found helpful in improving their trading accuracy.
Sometimes the evidence I weigh convinces me to take a trade, but often just one additional piece of evidence convinces me to pass on a trade I might otherwise take.
Again I want to thank Seanote for this thread!!
NUTSNEAL,
OK but isn't the pin the price to the strike game usually played in the days right before expiration?
OK but isn't the pin the price to the strike game usually played in the days right before expiration?
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