it's practically non-existant for the Feb. 127 puts (only 8 pennies as i type this, i.e., trading at 2.50 x 2.60 with a price of 124.55); yet for the Feb. 122 calls, the price is 3.30 x 3.40 (80 cents premium). In other words, NOBODY thinks the Dow goes down any more than the 100 points it's down right now.
That being the case, i took a shot and bought some 127 puts.
I went near the money a week ago at $1.50 for the March 125 put. Now i'm in the money, but not a lot of premium....yet. When the DOW breaks that 12,450 mark, look out below. We'll test 12,375, and after that 12,150. Tell me what catalysts are left for buyers?
OK, you were wrong, i was wrong. Now let's start all over.
When i brought up the subject, i found it interesting that there was hardly any premium for the puts, but the calls had a decent time premium. Now today i see it's the opposite. In other words, some big fellas are betting on a decline from this level (high 12,700's).
I see what you mean, but I wouldn't say nobody thinks we are going lower. Did you see the open intrest in the Feb 125 put. DIA will be down tomorrow 1/24 and you will be paid. I buy puts that are just out of the money every time we hit a new high. It's been successful 7 times in the last 2 months. I will not bet against the US market long term though.