On The Other Hand

To be fair and balanced I will point out that some factors are supporting a reversal today. The turnaround in the dollar and the fact that the rally is pretty miniscule despite a good amount of call buying.

3 comments:

nicasurfer said...

So if i am getting this correctly. The dumb money is actively buying the calls and the smart money is selling the calls. So this would suggest a turnaround in the market meaning headed lower.

Just trying to clarify your thesis hear.

Thanks, i love your blog

Tsachy Mishal said...

In options land the market makers do the selling and just hedge out their risk.

The crowd does the buying. Today the crowd is buying calls. The fact that the market is only up slightly, might point to and underlying weakness.

Last week we saw the crowd buying puts and the market would not go dowm. that was a sign of strength.

Im just pointing out both sides of the argument. Im still leaning towards no turnaround today.

nicasurfer said...

Awesome, never had it explained that way. It makes perfect sense.