Did YOU Buy Calls?
Wow, a pretty extreme reading this morning. This can’t last! Way more calls being bought than puts.
This is a contrarian indicator, meaning — the market should drop from here.
Of course, it’s not very prudent to use just one indicator on its own, but $CPC has been pretty useful so far.
You know, the people who make money from options sell them, not buy them.
This ratio is pointing us to the quantity of all open positions in all the options, isn’t this?
If they’re selling, someone is buying, right? So still, more call buyers, than put buyers.
And yes, I know that it’s best to sell options, not to buy them 🙂
Hey, this thing could fizzle by 4, but I would not be on the short side of this trade. Objectively speaking, since 1990 there have only been 8 occurrences of the DOW being up 3% or greater by 10 AM. On Avg, those days closed up 6.11%. The Q’s only reached the bottom of their range. Subjectively, I feel that we moved down so aggressively since the beginning of Feb, that some sort of relief rally was due. I alluded to this yesterday.
The more important question is,does this last past the close? One day wonder rally or do we get 3-4 days of good action and move back to the top of the range?
Full disclosure: I’m long the QLD
I’m long QLD, too. That’s my only long in the trading account.
Hi, I like what IBD says about days like yesterday, that it is confirmed by a follow thru day that occurs 4 to 10 days after the initial rally.
Kat,
The myth that “sellers” and not “buyers” make money, I see remains healthy and well.
jog on
duc
Duc,
it’s possible that I’m bad at options (ok, I am 🙂 ) but I only make money when selling them.
So far all my option buys have lost me money — every one of them.
Kat,
That may well be true for yourself, however, as a strategy, the stats simply do not support the assertion.
It is however one of the more pervasive and enduring myths of Option trading.
jog on
duc