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At 10:15 PM 9/10/98 -0400, you wrote:
> I don't know why the OEX puts ran up so much after the close, but I sure
got screwed on it! I was holding OEXUN Puts at the close of the market and
at 4:00 pm the option stood at 9 7/8. I've had good luck at skiming a few
eighths or quarters after the market closes and so I put in an order to sell
at 10 ( a nice 2point profit!). Boom, my order got executed, but only a few
minutes later the option was 11 1/4. I left a pile of money on that table.
>
> If you find out how to predict this, let me know.!
This may be irrelevant but, look at the NYSE net breadth today, the
continued flight to bonds and safety, weakness in the US dollar, bonds
rallying due to deflationary weakness, market action in Brazil and Latin
America, and the prospects for the next day's open. Look at the GAPS
recently. Amazingly, VIX WAS A HUGE 47.52 AT THE CLOSE TODAY.
Traders went into the close today KNOWING that the Starr Report might get
published on the internet tomorrow afternoon revealing all the grim and
graphic details and setting the stage for more uncertainty, AT LEAST. That
adds HIGH RISK to the trade in terms of volatility, and VIX popped because
the guys that write the OEX options are PROS, and tough traders. They are
survivors first, nice guys second.
A lot of short covering took place for some reason on the Globex today right
AFTER the close of the day trade. The S&P futures popped ten points right
away. Great additional shorting opportunity! And that was the second short
term short trade taken.
Currencies have also been active with negative correlation with the US stock
markets for a few days on reversals against the US Dollar. AND gold and the
XAU popped as well. Long bond rates hit all time lows, as prices peaked.
According to one Refco source today, many clients were making money today.
Thank you Bill, for the help on the trades! Indiscretion turned to trading
profits!
Brutal how it works, isn't it?
Michael Paauwe
mpaauwe@xxxxxxxxxx
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