|
PureBytes Links
Trading Reference Links
|
>Is this information useful to the daytrader working
>from his PC at home? It should be, from the standpoint of executing a
trade
>or delaying it until a more favorable minute. Perhaps one of the .ela
jocks
>on RT can turn this into something more useful, i.e. a system.
On a conceptual level, for the same ela jocks:
One modification of this info is to catch the lag between TICK and PREM to
time entries, even if one is not an arb:
PREM drives TICK and PREM is driven by SnP futures. Novice OEX options
traders believe that the options trade according to TICK - reality is they
trade per SnP futures.
TICK has "traditional" value in that sustained readings above +1200 or -1200
imply a turn pretty soon. Almost everyone knows this.
TICK's real value comes from its "big picture" component:
TICK divergences that form during the day (higher lows on TICK with lower
lows on index - and vice versa) catch the breakout move much better than
PREM itself since PREM oscillates around FV and may be in SP/BP mode just
before it reverses abruptly.
The fact PREM is in SP/BP mode makes an option purchase cheaper if the TICK
divergence shows its hand.
This concept works for quick daytrades, and DOES NOT ALWAYS WORK when we
have days of sustained sell program after sell program as we witnessed in
August 98.
Regards
Gitanshu
|