Wednesday, April 15, 2009

strange april options expiry

Calls out number puts, seems the fat boys, (Goldman, Morgan etc) have been going long calls, during normal o/e weeks the market sinks under these circumstances because every 1 pt drop means millions when the balance is leaning to the call side, Usually Goldman and friends are the ones that sell options then make them expire worthless, the tracks of this market lately point to the big investment houses taking all the government bailout money and buying stocks,then using option strategies to hedge. One simple method is to buy common shares say GE then sell calls against them and buy puts with the money from the call sale, then capture the dividend, who is buying the calls, and selling them the puts, Goldman, because they know all this new liquidity has to go somewhere this has very bullish implications for the next few months.