Zeev's Turnips Patch-No Politics (ZEEV)

[orkrious]

from minyanville

Buzz and Banter

QQQ put trade


Just a little color on Jason's comment on the put call numbers. Yesterday, a customer through Wachovia Bank bought 85,000 QQQ October 32.5 puts and the day before one customer bought 100,000 of the QQQ October 30 puts, accounting for the relatively high put call ratio over the last two days. The buyer in each case was one participant buying a large number of puts, not a great number of particpants each buying a small amount of puts.

My point is that a high put call ratio has much more relevance when there is buying or selling by the masses, not by one participant. The theory is contrarian based on what many market participants are doing, not one or two. This is just another case of misusing a technical indicator: the context in which it occurs is more important than the number generated.