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American Capital Agency Corp. Message Board

  • slegermark slegermark Jan 4, 2013 1:40 PM Flag

    Options pricing question. I just saw a disturbing flip in premiums that might signal a reverse.

    I have been tracking the basic materials play in KRO and bought a strangle in december. Then it pleasently began to rise well into profitability with steady upward charts on strong volume. Then as volume weakened I saw the signature HFT undulations in the chart. Now as it was last night, at-the-money premiums for feb were at a buck. Today during an hft undulation, the premiums flipped down .50 for the calls and up .50 for at the money puts.

    So, it went from 20/20 c/p 1.00/1.00
    20/20 c/p 0.50/1.50

    and this is during a rise in price. The market did the opposite of what one would think.

    I think they are planning something big here. Encourageing the selling of puts and the buying of calls only to trap them in a tank. This stock has a history of unusual moves like this.

21.88-0.23(-1.04%)Apr 17 4:00 PMEDT

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