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发表于 2010-8-31 09:40 AM
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sorry guys. I have no time to trade, need to get ready for the game.
What happened yesterday was due to the sellers of the index puts were short futures to offset losses from the sold puts, cause the market to a quick, sharp decline. From a shorter-term perspective, there still a tremendous amount of put open interest just below current levels on major exchange-traded funds, see chart below. If the market stabilizes during the next few days, short covering related to expiring put open interest in the next few weeks could support a rally from SPX 1,040, (a lot of puts were being sell to open at 1040 level and act as a support) the lower boundary of the current trading range. But if the 1040 level break, puts seller will short the futures again to offset the losses.
If you are an options player, a straddles would be the ideal low-risk, high- reward play.
Happy trading, good luck.
LinDan, I am coming....... haha
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