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Alex,
Sorry, the word I was looking for and couldn't remember was
"non-directional." So... what does non-directional mean?
If 6% of the volume is devoted to this concept, it must be a very important
concept.
Thanks,
Don
----- Original Message -----
From: "Jacobson, Alex" <AJacobson@xxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, March 14, 2001 3:47 PM
Subject: RE: [RT] GEN: Novice Notice
> Just to be clear 80% of it isn't fluff. About 60+% of option trading is
> nondirectional. Married puts would be just a trade. Where a long put is
> actually part of a synthetic long call.... stock + put = call. There has
> been an enormous amount of hedging activity completed in the past many
> months. Much of it occurs in the listed put market, but a great deal more
> occurs in the unlisted OTC collar market. This market is dominated by
long
> dated stuff which will probably not traded for many many months. Most of
it
> is dated after the first of the year anyway.
>
> -----Original Message-----
> From: Don Thompson [mailto:detomps@xxxxxxxxxxx]
> Sent: Wednesday, March 14, 2001 3:32 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: Re: [RT] GEN: Novice Notice
>
>
> Ira,
>
> So if these people are the insitutions, then the potential exists for a
fair
> amount movement.. The third situation is, if they do nothing into
> expiration, but that is stupid if they are sitting on a fair amount of
> value.
>
> But if they decide to exercise: Why is this dumping stock on to the
market?
> I just have a hard time getting the role of the
> market maker and the market they service.
>
> The good Doctor says about 80% of the option business is just fluff or
some
> kind of offsetting, because he says, or I interpret that the
> PC ratios published by the CBOE are just a couple of grain of salt.
>
> So why is this going to be a big deal?
>
>
>
> Ira wrote:
> > right now the most important thing is whether the holders of deep puts
> decide
> > to exercise and dump more stock on the markets or if they decide to
sell
> the
> > puts and force the buyers to purchase stock.
> >
>
>
>
>
>
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