Why the market will close higher on FRI

BeatingtheSP500 · Sep 16, 2008

Here's my opinion why the SPY will close higher than 121.00 (it's current price as of Tues 3:47)

At that time when the stock was at 121.00 the price of a 121 call with expiry this Friday was $1.85 (3:47) EXPENSIVE.

There was a great temptation to sell some of that juice, but I came to conclusion that's it's priced that way for a reason.

Certainly not bullet proof evidence, but a 'tell' IMO

forex-forex · Sep 16, 2008

This is what I think of your analysis.

Jahajee · Sep 16, 2008

..and, the market punishes the vast majority of participants, who currently hold tons of PUTS. The market's objective is to render worthless as many of these puts.
Possibility of SPX 1260 by Friday 4pm

dagnyt · Sep 16, 2008

Quote from BeatingtheSP500:

but I came to conclusion that's it's priced that way for a reason.

That is not a reasonable way to look at it.

The puts were equally high. Why don't you think that selling the puts is a mistake and that SPY will finish far below the strike?

Why do you believe this is true for calls not puts?

Mark

BeatingtheSP500 · Sep 16, 2008

Quote from dagnyt:

That is not a reasonable way to look at it.

The puts were equally high. Why don't you think that selling the puts is a mistake and that SPY will finish far below the strike?

Why do you believe this is true for calls not puts?

Mark

I gave that consideration, but the SPY had a 117 handle earlier in the day, and I think it is more likely the market moves up than revisit the lows of the morning. We'll see in a couple days. SPY was at 121.00 at the time. Again, my main point is the JUICE was a tell. It's all odds, nothing is certain.

May not be reasonable but it's my interpretation.

BeatingtheSP500 · Sep 19, 2008

Quote from forex-forex:

This is what I think of your analysis.

Hope you didn't trade congruent with your response.

Never in my wildest dreams did I think we'd touch a 113 handle on the SPY first though.

sellindexvol66 · Sep 19, 2008

Quote from BeatingtheSP500:

Hope you didn't trade congruent with your response.

Never in my wildest dreams did I think we'd touch a 113 handle on the SPY first though.

i know you are trying hard and seem very sincere; but you are aware we did print >40 vix? your juice was such as a result of that and not the forthcoming news, imo.

no one expected this. i was short es puts in the 1200 range and the post about short puts is bs. i could have easily owned es 60pts underwater ..each. the guy selling 50 es puts 100pts otm is certainly liquidated. i don't care what his account size WAS. my size was tiny as i held them through this.

Jahajee · Sep 19, 2008

Quote from Jahajee:

..and, the market punishes the vast majority of participants, who currently hold tons of PUTS. The market's objective is to render worthless as many of these puts.
Possibility of SPX 1260 by Friday 4pm

We are almost there but look for a swift retreat....

xflat2186 · Sep 19, 2008

Quote from Jahajee:

..and, the market punishes the vast majority of participants, who currently hold tons of PUTS. The market's objective is to render worthless as many of these puts.
Possibility of SPX 1260 by Friday 4pm

Rubbish, you think like a dead pan retail investor. The majority of those puts are protecting long underlyings and the managers who bot them are happier if their longs do better

Jahajee · Sep 19, 2008

Quote from xflat2186:

Rubbish, you think like a dead pan retail investor. The majority of those puts are protecting long underlyings and the managers who bot them are happier if their longs do better

Show us the evidence of such.

All these put holders - who were gleeful on Thursday at SPX 1130, were left stranded with worthless puts. When did they buy the underlyings and when did they buy the puts?

And at the close with SPX 1250, did their longs do better? Did they buy more puts to protect their underlyings?

Do you realise how inane and vacuous are your explanations?

Get a drink or two and drown your losses. It happens. Good luck next week,