cobra, and all HHs:

我是谁

Recently the market went against the ISEE or CPCE CPC numbers, almost made me vomiting.

I begin to wonder, is it posibble that each  MM just sell calls to herself, from left hand to right hand, from A account to B account... not really selling calls to retailers?   This way, they made CPCE low, and ISEE high, but fooled data readers(like, me, etc.)

Please, cobra, and other HHS, consider this topic and shed light....

CoolMax

You need find the way to reading those numbers.
Market is changing all the time. and the meaning of each number changes all the time.

看到你这个问题，我想到了一个中国成语。就不说了，如有冒犯。非常抱歉。

我是谁

You need find the way to reading those numbers.
Market is changing all the time. and the meaning of each number changes all the time.

看到你这个问题，我想到了一个中国成语。就不说了，如有冒犯。非常 ...
CoolMax 发表于 2009-10-15 17:46

Thanks, coolmax.  no冒犯。no need to 抱歉。But please tell me how do you read them?  give an example?  You know I need it badly.

Cobra

介个是一个读者的comment:


I think the low put call ratios are a trap into expiry.
Dealers are short upside calls in the SPX (1100 strike particularly) and other indices.
This creates a toxic mix into Friday forcing dealers to cover or roll their calls to later months.
Put call ratios are thus low to reflect this activity.
Add in all the earnings results from here to Friday morning and the low implied volatility levels implies there is a potential for a continued equity melt up for two days.

我是谁

介个是一个读者的comment:


I think the low put call ratios are a trap into expiry.
Dealers are short upside calls in the SPX (1100 strike particularly) and other indices.
This creates a toxic m ...
Cobra 发表于 2009-10-15 18:02

Thanks, cobra.  Even if this is true, my puzzle still can not be solved.
What puzzles me, is that last half years, average of ISEE had been way above 100, and CPC way belw 100.  If that means dealers had sold calls way more than puts (net amount),and last half year market went up so much, it seems dealers lost a lot of money by selling more calls than puts.  Why would dealers do that?  They had a lot of money ( maybe free money),  they pushed up the market by buying shares of stocks, in the mean time, they were selling calls, only to let retailers making money easier and faster than dealers? this does not make sense to me...
  Sorry I can't express myself very clear and yet I am looking for a clear answer...

Cobra

Thanks, cobra.  Even if this is true, my puzzle still can not be solved.
What puzzles me, is that last half years, average of ISEE had been way above 100, and CPC way belw 100.  If that means dea ...
我是谁 发表于 2009-10-15 18:18

简单得讲吧，MM也是人，是一群人，所以不是总赚钱的。这次可能是这帮卖call的错了。

LadyLuck

6# Cobra


请教老大： XLV got one single put order at $30 for 1427 contracts, that is over  $12k. Who would have done that? to protect their long position? This is from one dealer only!

2001ht09

dividend_growth

你要是研究过2003-2004年时的CPC和ISEE，就不会"vomit"了。

dara

I think CPC  number has to be read differently.

In the bull market, the lower it be, the higher market would go in the short-mid term, though you can argue the next day may be down.

流动的建筑

I read a research paper a while ago which investigates the impact of option trading on stock market. Basically the conclusions are:

1) Option buying does have positive correlation with the market direction; and
2) Option transactions have no statistically significant impact on market direction.

The first statement says that option buyers may indeed have a bias of information advantage over the majority of market participants. While the second one says that option trading are merely another form of trend following, just like stock trading. The market goes where it should be regardless of option actions.

So if we cannot distinguish buying from selling options, we should just forget about analyzing option actions all together and get back to the root - study the market in stead.

1# 我是谁

Diffusion

I read a research paper a while ago which investigates the impact of option trading on stock market. Basically the conclusions are:

1) Option buying does have positive correlation with the market d ...
流动的建筑 发表于 2009-10-16 17:47

nice comment

LadyLuck

11# 流动的建筑


老大，我以亲身经历说，您说的是书本理论。Big option traders know something we don't.

ranchgirl

Interesting discussion

流动的建筑

Yes, they always do, but mostly not on delta, i.e., the market direction.

Don't alienate theory from practices if you want to make money consistently. Personally, I haven't encountered a single scenario that is not thoroughly studied by academia yet.

11# 流动的建筑


老大，我以亲身经历说，您说的是书本理论。Big option traders know something we don't.
LadyLuck 发表于 2009-10-16 21:52

北京哥哥

其实根本就没“MM”这一物。。。。现在只不过是以诈传诈，谎言说多了，就成真的了