ALL options finished RED EXCEPT in the money PUTS. I see it as a GREAT signal for PUTS and shorts. Somebody held the near and oom PUTS down as hard as anything I have ever seen.
I watched in amazement how the prices on PUTS went way up on the open, expected; then retraced as usual to fill gaps. Then BANG... slowly they kept fading and staying down EVEN THOUGH there was steady bigger BID vol. than ASK all day!!!???
My summation is BP is about to implode at its biggest one day level yet as the "dark forces" were loading their wagons with near the money and OOM PUTS,
Specifically, I was watching the July 25s (for fun... bought a few); the 27.50s, 30 and 32s, puts that is.
I was shocked somewhat. I have only seen this rarely and when it happens the stock runs hard and fast toward the options side that had the green on the day. In this case the PUTS.
All opinions and thoughts welcome, this is quite interesting.
“Now, as through history, financial capacity and political perspicacity are inversely correlated….So inaction will be advocated in the present even though it means deep trouble in the future. Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound.”
-J.K Galbraith, from The Great Crash 1929, written in 1954.
By the way the in the money puts seemed to drop in value between the open and the close. It's true the price of BP went up during this time period but a substantial factor in the drop came probably from the drop in implied volatility. Peter
as often as that happens the way ur predicting it goes the other way more times than not. some market readers wont long a stock until the options are overloaded on the put side. and vice versa. they call this contrarian indicators.
last month longs bashed the dark side and claimed MAX PAIN was something ignunt like $35 or 37.50 for your same reasons.
It went nowhere close.
BP is a dead stock walking and ONLY when you see NO longs or pumpers will there be a significant reversal. When it is all shorts, bashers and suicide candidates, THEN you can go long for a little while.
all these options have a premium built into them, and with the puts, they have built a substantial premium into them, since BP is in a death dance. . . so even though the stock is going down, they are discounting the price of the puts through the premium you have paid to own the contract especially in the out of the money puts.
it is really rigged in all manner of ways . . . even when the market is going down, you can almost always see a big bump up somewhere in the day, which is someone probably covering a short in a manner to take out the day traders with shorts who have set their stops to sell if the price goes up too much . . . well, that is the deal I guess, if you want to play you have to pay. But don't look for "fairness" in any of these deals.
well you are going to see the same vol for the same strike, date regardless of put or call. Otherwise there would be extreme arbitrage, so I dont understand your post about premium for puts but not calls, but hey if you are making money that is all that matters. Good Luck long or short, or long one minute short the next.
All it means is that volatility went down. Why? People think it doesn't have much farther to fall...otherwise they'd be buying puts and driving the price up.
Or let me guess, it's a conspiracy. Someone is "holding the price down". By doing what? They'd have to be selling them to keep the price down.
If that were the case; BP is less volatile... then:
Then why the RED finish on the ITM Calls?
and seco nd... Why the premium imbalance btw ITM Calls & Puts.
There wouldnt be a 15% + discount on the calls and not all would have finished red; you should have some green somewhere.
I think with all the BS in the world going on, the total meltdown in DC and the Europeans doing what USA should have... we have a mega bear crossover coming soon.
All thoughts welcome. And as iusual .... the candles dont lie
and the week to week; and day to day look VERY bearish. (But then Obama and GS are in charge so who knows what is next?)
te two week formation is bearish... however If bp is saying that the hole is fully patched we could see some points up....
That's why I've wrote some itm puts(to partly hedge my short position)...
July oe is still a little far away, so I'll probably wait some days before opening spread, butterfly or any other strategies....
I think you have something here. Take a look at Juner 18th...Someone put a floor at the 30.50 level, only to begin a downtrade on the next trading session (June 21, 2010). Since then, we continue to move lower.