If today volume on the option expirations for September puts were heavy, how does one know if these are bought to close out there position or taking a new position. Where would you finf the data and can we know for today's situation. I would think these puts where bought and not one's closing out there position, because wouldn't they be required to buy the stock back therefore making the shares go higher. I'm curious because I think news will come out before the bell on Monday but haven't the faintess idea to which way.
Most brokerage houses report option volume and open interest for each call & put strike price. The open interest number is typically updated only once - at the start of each market day. Today's Sep $5 Put numbers are as follows:
volume - 5,677 open interest - 5,407
The open interest total represents the number of open contracts in 100's at the *start* of trading today. We will have to wait until tomorrow to get the report on how much of the 5,677 Sep $5 puts traded today represent new contracts opened.
As already observed by others, MOGN's action today did not mirror that of SUPG, which seems to indicate today's action was profit taking or manipulation but not a FDA leak - at least not a leak to an announcement coming next Monday. Additionally, I note that the Aug put volume today was relatively light. If there was a leak, the Aug options would have offered the most financial reward, but they were not really in play. My take is that the significant run up in SUPG and in the market in general has resulted in two days of profit taking, and that this was effectively used by MM's to shake weak hands fearful of a leak/negative news. Many stops were triggered today. A survey of Thomson's data indicated MM's were accumulating again today. Most of the long calls are still in play. I look forward to seeing tomorrow's option numbers to see what the true sentiment is.
OK, here's the more complete story on Friday's Sep $5 puts:
Volume - 5,677 Aug 5 Open Interest (before market open) - 5,407 Aug 8 Open Interest (before market open) - 5,228
As you can see, the open interest actually *decreased*. What does this mean? There was no rush or panic by those in the know to purchase puts in anticipation of pending negative news. Someone made a tidy profit on Friday by selling their puts into the fear. This is bullish. That's all the high volume on Friday was, - fear and capitalization on fear - nothing more.
Additionally, more call contracts were opened up across the various months - another positive sign. I believe the option news published today validates the overall consensus of this board - that Friday's action was a combination of profit taking in the general market, in SUPG in particular after its run up, and panic that negative news was coming today. We can conclude that there was no FDA leak. Expect more volatility and take advantage if you can.
PS. I apologize for not being able to get the updated option info posted before today. I learned that the info is not updated over weekends, but rather on the next market day.
Thanks for the great post. I guess I need to learn more about how to spot these things, like Puts being traded heavily. Fortunately, I *did* put in stops way back at $6.75, so I did not get hurt, but I kept thinking why, why, why?
Now I will have to watch the open versus traded on the Put options next week.
When you find out how many contracts where open can you relay the info to me, roryrae. After watching today's action I got scared due what my own scenerio of what was going to happen. It's hard to find people on this board that's willing to share their information. I'm long on supg due to dacogen but I can't stop shaking my head. The mm's are really good in making you sell low and buy high.