Large amount of Put Options placed for Oct 6th....
- Thread starter Cyre2067
- Start date
I'm not sure what this means -- seems to be some information missing. As far as I know, dates associated with Put options are expiration dates. For DIA, for example, October puts expire on the 21st. (Expiration dates for puts are always around the 21st of each month.) Beyond that, October 2006 put options originally went on sale anywhere from 6 to 27 months ago and gradually lose value if it doesn't look like the bet they represent will pay off.
I looked via my online brokerage account, and didn't see any preponderane of interest in Oct options vs Nov, Dec, Jan, or Jan 2008.
If a large number of options were bought ON Oct. 6, then for what expiration date? Confusing.
I do see huge spike in the number of DIA trades for strike price $116 as opposed to other strike prices and future months, however, this is not much of a bet because the current DIA price is $116.72, so this might happen every month. Also, there is an equal number of trades for $115 as for $117, which is typical, so it's not like a preponderance of people believe the Dow is going to go up vs. the number who believe it will go down, and again, $1 in the DIA price doesn't reflect anything outside of normal Dow fluctuations, so it's not a wild bet or anything.
I looked via my online brokerage account, and didn't see any preponderane of interest in Oct options vs Nov, Dec, Jan, or Jan 2008.
If a large number of options were bought ON Oct. 6, then for what expiration date? Confusing.
I do see huge spike in the number of DIA trades for strike price $116 as opposed to other strike prices and future months, however, this is not much of a bet because the current DIA price is $116.72, so this might happen every month. Also, there is an equal number of trades for $115 as for $117, which is typical, so it's not like a preponderance of people believe the Dow is going to go up vs. the number who believe it will go down, and again, $1 in the DIA price doesn't reflect anything outside of normal Dow fluctuations, so it's not a wild bet or anything.
Rich
The Living Force
"A European put option allows the holder to exercise the put option on the delivery date only. An American put option allows exercise at any time during the life of the option"http://en.wikipedia.org/wiki/Put_optionadpop said:
I would assume these are US puts. Further to that from wikipedia to point out the significance of an unusually high number of puts:
"In general, the buyer of a put option expects the price of stock to fall significantly, but does not want to sell the stock short because that could result in large losses if the stock does go up anyway. (With a put option, the loss is limited to the purchase price of the option.) The seller of the put option generally feels that the stock in question is reasonably priced, and should the price fall, the seller may be willing to become the owner of the stock at a lower price, considering it to be a bargain. (On the other hand, the seller of the put may be merely gambling.)"
Difficult to quantify, verify and put into perspective without access to actual data but seems quite a sensible hedge given current economic conditions and commentary.
To speculate based on what i've read on sott economic commentary, if i was working for a government agency plunge protection team http://www.signs-of-the-times.org/signs/chains/signs20060915_DowntheTubes.phpresponsilbe for bouying up the economy by buying large quantities of stock i would want to protect myself from potential loss in the event of a 'correction'.
ArdVan
Jedi
I don't know the following blog falls into the same category:
http://cryptogon.com/2006_10_01_blogarchive.html#115999695350561842
http://cryptogon.com/2006_10_01_blogarchive.html#115999695350561842
