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SPDR Dow Jones Industrial Average ETF Message Board

  • cudadida cudadida Jan 22, 2007 12:12 PM Flag

    Feb options premium = very interesting,

    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.

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    • 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?

      • 1 Reply to meanscreen2000
      • 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).

        Let's see what happens with this indicator.

    • 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.

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