Zeev's Turnips Patch-No Politics (ZEEV)

[Chris McConnel]

Zeev,

the equity P/C has been very low since Thursday. Is it possible expiration is skewing it?

From thestreet.com:

Put-Call Ratio
Dan Fitzpatrick
8/19/02 11:35 AM EDT

Jim, there is something else behind this rally, and its option expiration related. The dollar-weighted put-call ratio on the $SPX was as high as 17 this morning. That indicated a massive imbalance of put options in market maker's books, and will likely take several days for them to work off. Such a high dollar-weighted put-call ratio is very contrarian -- With such a high open interest in put options, who is left to commit money to the short side.

I spoke with Fari Hamzei of HamzeiAnalytics.com, just prior to posting this, and he said that the ratio is already down to 10.5. Still tremendously bullish, but not as obscenely overweighted as 17.