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Allan Pullman wrote:
>
> One Traders strategy is to sell his position in a stock when the Options
> on that stock are expiring. He states " We'll sell into the option
> expiration week (the 3rd week of the month) as it is generally the up
> cycle week of the month". Could someone please tell me what is
> happening that may drive a stock up when options are expiring??
>
> Regards, Allan
Allan,
My guess is that this works only in a bull market because in an up
market, at expiration, there will be many more in the money calls than
puts causing the short calls to be assigned and forcing a net on balance
scramble to buy stock. I bet the opposite is true in a bear market.
When we do get a bear market, many "market geniuses" will be forced to
learn many lesssons. Most of them have a historical time frame of less
than five years. Just goes to show that "genius" is a bull market.
Exercisingly,
Norman
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