The Options Box

[Toscano]

I'd like to learn more about options trading and what these CBOE statistics mean...



I have copied below the stats from the previous post and will go over them as best as I understand them...


For a historical listing of CBOE Market Statistics Summaries, visit the following web address:
http://www.cboe.com/tools/statistics/summeriz.asp




In the above URL you will get a more extensive set of stats similar to what follows.


CBOE Market Stats for 02/22/2001


Put/Call Ratio: .78



The above is the amount of Puts divided by the amount of Calls traded.

The more Puts are bought the more bearish sentiment there is from the public. The more calls are bought the more bullish sentiment there is from the public.

HOWEVER...

This indicator is a contrarian indicator based on the assumption that the sentiment from option buyers will be wrong

Therefore, the lower the number, the more BEARISH it is based on the contrarian theory that buyers are TOO optimistic (that stocks will go up.) The higher the number, then it is considered BULLISH, since the sentiment would be too pesimistic (that stocks will go down.)

It is consider that anything higher than .75 the outlook will be bullish (based on the excessive pesimistic outlook). Anything lower than .40 then the outlook is deemed to be bearish, (based on the excessive optimism outlook). Anything in between it is consider a "neutral market.



http://www.thestreet.com/metrics/sentimentsignposts/1243017.html


There is a good explanation here, except their English site is Kaput for now... (if you speak Dutch, however, you will be able to understand it):

http://www.night-trading.com/help/putcall_en.html

from there, you can go to the English site, once it is working.


____________________________________

VXN OPENING VALUE: 69.99
VXN HIGH VALUE : 72.81
VXN LOW VALUE : 67.97
VXN CLOSING VALUE: 71.83

VIX OPENING VALUE: 28.79
VIX HIGH VALUE : 32.96
VIX LOW VALUE : 28.70
VIX CLOSING VALUE: 29.77

___________________________

These are the "Volatility Index" values (Open, high, low, close)

The VXN is a new measure, based on the implied volatility of the companies that form the NDX (Nasdaq 100 Index) Although this has just started to be used in January, the CBOE has historical data gouing back 10 years I believe).


The VIX is an older Index reflectic more of the COPMX (Nasdaq composite Index. -- representing a broader market).


These Volatility Indexes measure the implied volatility in the options of the companies in the respective indexes. (i.e. Nasdaq 100 NDX symbol: VXN... and the VIX Nasdaq Composite --COMPX)

http://www.cboe.com/tools/historical/vix.htm


Implied Volatility:

There is: Historical, Future, Expected and Implied Volatilities...

Here (about the end of the page), you will find an explanation...

http://www.cboe.com/tools/historical/vix.htm/education/advanced.htm" target="_new">http://www.cboe.comhttp://www.cboe.com/tools/historical/vix.htm/education/advanced.htm


The two Indexes are ploted here for a graphical picture of the numbers... (follow the links)


http://mach.quote.com/quotecom/stocks/charts.asp?page=Stocks&option=Charts&interval=D&di....


http://mach.quote.com/quotecom/stocks/charts.asp?page=Stocks&option=Charts&interval=D&di....


For some reason the above links do not seem to be working try this (openining it on a "new window"

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=15395795

from there... follow the links



_____________________________

EQUITY OPTION

TOTAL EQUITY CALL VOLUME : 654,384
TOTAL EQUITY PUT VOLUME : 444,356
TOTAL VOLUME : 1,098,740

INDEX OPTION

TOTAL INDEX CALL VOLUME : 106,620
TOTAL INDEX PUT VOLUME : 152,462
TOTAL VOLUME : 259,082

________________________________



The above are the actual calls and puts for equities and index contracts


One of the best sites to learn basic Option terminology and concepts:

http://www.cboe.com/education/

http://www.cboe.com/education/basics.htm



I believe that now is an excellent time to position oneself with some calls of beaten down tech leaders such as MO and SUNW...


It could very well be... however, consider that we may continue to go down a considerable amount. I do not know, but every thing seems to be pointing that way....

SUNW I believe it to be a great company with great future, except it has been affected by the current economic environment.

I do not know much about MO... (I guess I feel comfortable with the food side of the company.. the tobacco... hmmm I do not know....

I hope the above helps... Good trading.

(look in the bibliographt section of the CBOE, for suggested reading...


Sorry for mispells... it is late and this new toy does not have spell-check.


I was trying the above links.... and the only way I can get them open is if I right click and then open a new window... otherwise they do not open for me.