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Put Buying Surges As Nobody Believes Stock Ramp Anymore, October 108 Puts Most Popular SPY Option Class Today
After 831.8K SPY puts were traded yesterday (vs 521K calls), today the trend of aggressive protection buying continues, as almost twice as many puts as calls has traded so far: 496K vs 272K. As the chart below shows, the top five SPY option classes traded today are all Puts, all of which have an October maturity, and strikes of 108, 114, 115, 116, and 112 in terms of popularity. With today's outright criminal market intervention, the surge in popularity of hedging the Fed's market making does not surprise us.
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Bullish.
Anyone have any idea who's selling them?
Market short interest at all-time high, put to call ratio to the moon, keep bullish this will be an overnite implosion one day soon with Obamas approval numbers continuing to collapse.
Maybe Robotrader can switch to reverse boner chartings of politician and consumer confidence stats along with naked pics of Napolitano and Pelosi.
That gives me nightmares even thinking about it!
Aye, some anti-particles are best left in the dark-matter cloud.
In General large options positions are written by Market Makers (MM) and in general large options positions will expire worthless. Look at something called Maximum Pain.
Good Luck all...
The MM's can also hedge the delta of the short puts by shorting stock. Easy on a POMO day.. Hedging the rest of the greeks, I guess it involves a lot of praying..
Obamatron's "true believers" would be my guess!
Shit might as well go all in.
Well how can banks make cash any longer?
Taking the POMO cash and going short. They get to achieve a few goals such as collapsing the markets increasing the likelihood of QE and ensuring that the Republicans gain control of the house by placing further pressure on the inept White House to spend spend spend as the economy continues to deteriorate.
For these reasons I think the markets heads downward into elections.
They can make money by front-running flash crashed stocks- like apple today?
Agree with you both. The big boys need volume and to get rid of the Democrats. Kill two birds with one stone.
Please? And thank you!
I bought 5 Oct. 112 SPY puts yesterday when SP500 was 1147.
Have not bought a put option in over a year at least.
Which makes me believe that once window dressing is over....! Or maybe not?
Robotrader can you post this as a boner chart along with a pic of some diseased street whore please?
Currency fluctuations explain today's erratic stock behavior. The weak dollar is articially inflating equities as it is down 1% against the Euro alone. The DOW would be down 60 points if the dollar wasn't be taken to the woodshed.
Yes as usual 'dollar down/stocks up', 'dollar up, stocks up', same old solid market logic excuses for the criminals pumping stocks no matter what.
when it becomes "dollar down, stocks down, Gold up", then ZH crowd will go berseck.
Same old mistake as well.
If the Dollar is going DOWN, inflating US stocks UP, then by virtue of the Euro going UP, European stocks should be going DOWN.
See that happening? I don't.
DavidC
All these PUT buyers paying to be raped - Just my opinion. I may be wrong, but lets watch and see.
Chinese Fortune cookies are being printed now, 'You will have many POMO's in the next 3 weeks'.
Thanks for the laugh in these tense times.
Gold is spiking now, up $2 in 90 seconds.
Toppy toppy. Odds on the put buyer will be hitting bids on the dirty dozen Friday before cruzin the streets for dischelved cougar meat
Who you call'n disheveled?
Yeah I'm talk'n to you.
In case you hadn't noticed, this is the end of PPT. Which is corrobated by other evidence that the United States is not trying to prop up the economy anymore. The economy has flatlined at 0.
My name too. Yes I agree, theyre done.
As someone pointed out a long time ago, the PPT is doing a really lousy job (currently, they've gotten better!)
Well, well perhaps we are going to see some Karmic payback for the Fall of 2008 which gave us Obama right before the election
They will all expire worthless as they ramp the market higher.
Anyone else notice that only the calls are showing a profit? :D
Back in July/August people kept bringing up the huge OI in Oct 108 puts.
Oh well, right.
Show me 1 time in these last 3 years where a general bear mood turned out profitable for the masses?
NOP
They'll all get smoked starting 10 oktober.
By mid Oct they will see their all-out stock pump'o'rama has actually pissed the people off more, theres no chance of salvaging an election, and all complacent Hindu bulls will get their nuts chopped off big time.
The sheeple are to dumb to realize the fed is pumping this thing up.
Zero vol market-wide, SOMEONE sure isnt buying the rampjob!
You can tell them. It won't make any difference. "How does that affect me?".
The markets, the Fed, the BoE - they're just things that happen behind the scenes. What they do has nothing to do with real life....
They don't ... until they do.
Things that matter to the peeps:
Bank closures. Retirement fund erosion. Loss of credit. Mortgage underwater. Dead residential real estate market. Massive unemployment in evidence. Rising cost of living. Wage stagnation.
All these problems (as bad as they currently are) are being kept under a lid by the Fed and the other central banks. If they ever stop supporting markets and banks then all those things implode toward the negative and right now. And people will notice.
Perception management works only until it doesn't. But that's all they've got left. Suddenly all is illusion and grim days lay ahead.
Add: SNAP continuing to feed the children, Unemployment checks NOT bouncing to:
THE POSSE
http://williambanzai7.blogspot.com/2010/09/posse.html
Would it not be a reasonable position that as market manipulation is becoming more known (you can find comments on many other sites) that HeliBen would let the market head south to diffuse the attention with subsequent manipulation once the sheep go back to sleep? Or, more importantly, since there are diminishing returns on pumping that any Black Swan (pick your choice) would crash this bitch because everything about it is so thin.
"POMO" should be a verb. As in, "Dude, last night I went out and freakin got POMOed. It was awesome" ...
Transports still can't break resistance.
Tyler: Two questions for you-
1. Is it "criminal" if the Fed were buying stocks, or would that technically be legal?
2. Is there any empirical evidence that these options buys (puts) have any predictive value?
Not speaking for Tyler, yet remember the Federal Reserve is a PRIVATE member-owned bank (as Federal as Federal Express) via shareholders. And no, you can not buy Federal Reserve shares.
Anyway, as such, members who 'own' the Fed include JP Morgan and others. So the "Fed Buys" via their retail arms as could be commanded from above (Rothschilds, etc)and in unison. They work together to manipulate stocks, commodities (oil, wheat, sugar, etc), precious metals (gold, silver, etc)...
Of course it is not criminal for JP Morgan to buy an sell shares in publicly traded companies.
In this environment, it is all about liquidity. The faucet has run dry. No more artificial pumping by the Fed.
More put buying?
Any wonder why the bears keep getting their asses kicked?
Sheesh, no wonder stocks are flying.
LOL
I hope you don't leave after the tide starts going back out. We need some dissenting humor after getting thrashed on this extended move up.
You just wanna see all the babes WITHOUT their swimsuits, dontcha?
5-yr. yield at world record lows
And people are crazy enough to keep shorting stocks?
http://www.marketwatch.com/story/treasury-sells-5-year-notes-at-lowest-yield-ever-2010-09-28-136560?tool=1&dist=bigcharts
And gold at all-time highs and having gained 30% in the past year alone.
Too bad there isn't an ignore feature with zerohedge. You're no better than the trolls on the yahoo message board.
Beautiful Pic. keep it coming.
Don't think ultra-low T-yields now is a reason to go into stocks. Thanks to POMO ALL assets are up. So AU at 1,300 is not that surprising either. Too many people are doom and gloom, usually that means markets will continue to go up, at least in the near term. Then, markets will tank because of a non-US macro event I reckon.
I just hope youre fully long when they pull they see its game over and pull the rug out some evening soon like a thief in the nite.
Ya know, it's hard work pushing all dem buttons and pullin' dem levers! Bernanke's just exhausted.
there is certainty here - certainty that the markets are not priced by investors, but rather by a criminal cartel, one which the authorities...ahem..cough..."don't see"
pissing on a live wire
Nobody's talking about the obvious. A Q3 saving ramp, boosted by dovish Ben and his POMO party.
Q3 'save' for what?
customers buy puts on rallies and sell calls as the skew of option curves steepen. this is not uncommon, so there is no surprise that people would be buying these puts as the market started to rally off its lows.
'Market started to rally off its lows' lol the markets are near all time bubble highs and have never been more ridiculously overvalued.
No, I meant that on the day the market had been much lower, and it was now up on the day. (Rallying off the day's lows). When markets rally, volatility in options comes in, and puts become bid relative to calls as market skews steepen. This is a reason that people would be buying puts on a rally. (and it would be normal that they would be selling calls into the rally) On a selloff (not a sharp one, like Oct. 2008 or anything), it is normal for customers to sell puts and buy calls (the opposite of a rally), and generally for vols to rise.
Few catch the big moves, just make a little money every day and go home.
Gold is going to make another Huge Surge here soon.
Looks like the 800lb Gorilla today
of course ... people who buy SPY puts generraly tends to have long equity positions is of no consequence, right?
Has anyone here looked at the correlation between TNX yield and the S&P 500 (past ten or so years?) Seems to have predicted huge market moves. Yields tanked right before the huge selloff of 2008/9. They just recently tanked again even more. This also seems to line up with the 1929 to 1934 timeline going into 2011/12. ??
The title should be "Put Selling Surges" rather than "Put Buying Surges"...people are basically looking for yield with this. With a sideways market, a viable strategy to generating income is to sell puts... Many brokers/private banks also sell this strategy as Reverse Convertibles.
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