My Response

There is a very interesting discussion on the message board on why we are seeing record breaking readings on many option indicators and I wanted to respond to some questions and comments.

Market Owl said that Citigroup options might be skewing the readings, since the stock is so low priced. I would note that puts in Citigroup trade as well. Additionally, the Nasdaq TICK hit a record yesterday not seen since 2002 and Citigroup definitely did not affect that. That seems to confirm how bullish sentiment was yesterday.

An anonymous reader asked if inverse ETFs could be skewing the data. The ISE equity only excludes ETFs and it also has been sitting at record levels so I don't believe that is the case. I am not certain how the CBOE deals with ETFs.

A few readers suggested that liquidity might make these readings irrelevant. I would remind readers that we had a nearly 10% correction in January despite the liquidity.

3 comments:

Onlooker said...

ISEE Equity only numbers are off the charts today! Yikes

I guess we'll have to see what the end of day numbers end up showing, as we don't have historical data on intraday readings to compare with (unless somebody knows something I don't).

Tsachy, have you ever seen such high numbers intraday?

Tsachy Mishal said...

I have seen the opening reading very high but never this far into the day.

Anonymous said...

You should cover it sounds like you're starting to freak out. Don't worry it's just money.