Replies to post #8217 on ajtj99's Market Pulse

[market_watcher]

I posted yesterday that alot of large NDX components have max pain values far below where they are now. Some as much as 10%.

At what point, if any, does individual stock's max pain counteract the QQQ put positions? Each stock isn't much individually, but overall, there are probably more calls on NDX components that need to be killed to satisfy max pain than there are puts on the QQQs.

[ajtj99]

Wow, that QQQ action is pretty impressive, although I'd caution anyone against using Yahoo's numbers (they're sometimes unreliable). 34 is quite possibly October Max Pain currently on the QQQ.

However, the CSCO options for October are just the opposite, with huge call positions at 17-1/2 and 20 and very little put open interest at those strikes.

INTC has more calls than puts at strikes 22-1/2 and above for October, Dell Pain is at 32-1/2 for Oct, MSFT pain for October is firmly at 25, with 100,000 more calls than puts at strike 27-1/2.

NDX Max Pain for Oct. is 1300 solid. Max Pain for the SPX is 995 for October presently by the eyeball method.

I think the best way to reconcile these conflicts in the put/call in the index and equities is to have a local high here soon, a dump after Sept. expiration, and a rise into October expiration. We'll see if that transpires.

[SteveO]

My eyeball cannot see how it is anything but 32. 34 leaves 750K calls in the money. 32 leaves only about 300k puts in the money and eliminates nearly 282K calls. 34 is max pain for the puts and no pain for the calls. First they have killed the puts. Now to 32 to kill the calls IMHO.

http://finance.yahoo.com/q/op?s=QQQ