When the details of the short-selling ban began to leak out last week, options traders around the world snorted and said to themselves, “So what?” That’s because it is easy to simulate a short stock position using options. A synthetic short stock position is composed of one long ATM put option and one short ATM call option, on the the same underlying and in the same expiration cycle. It has a risk profile identical to that of being short equity…
Tuesday, August 12, 2008
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Here are some data that have us thinking this afternoon: maybe the Nasdaq doesn’t resume its parabolic move from here. There are certainly plenty of short term reasons for Nasdaq bulls to frown and doze off for awhile: the QQQQs are up over 7% in 7 days. Money flow has been stagnant. The ADX line is only barely ticking up, and RSI readings at various periods are all inching toward overbought. The McClellan Oscillator (attached) may have peaked, and even…
Wednesday, September 24, 2008
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