tag:blogger.com,1999:blog-1708908742323002823.post8849797331626709937..comments2024-02-10T02:18:27.240-08:00Comments on Trader Dan's Market Views: Limits in the Comex gold and silver marketsTrader Danhttp://www.blogger.com/profile/05484363461047659198noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-1708908742323002823.post-11859109435732155542011-02-21T17:09:33.312-08:002011-02-21T17:09:33.312-08:00Thanks Dan...for once I didn't have to learn a...Thanks Dan...for once I didn't have to learn a lesson from the market, the hard way.Jeffrey McLartyhttps://www.blogger.com/profile/06867291609706194522noreply@blogger.comtag:blogger.com,1999:blog-1708908742323002823.post-4490183262432256262011-02-21T15:44:36.475-08:002011-02-21T15:44:36.475-08:00Jeffrey:
the option markets generally will indica...Jeffrey:<br /><br />the option markets generally will indicate at what level they think price will move to. They will trade freely when the futures board is locked limit bid or offer so they can give you a gauge of where the market thinking is in regards to where the consensus at that moment believe price is headed. That is why they remain liquid during limit locked futures markets. <br /><br />Remember however, option writers can get hurt very badly if they are writing calls in a bull market and do not give themselves enough protection for a big upmove. That is of course why the premiums on those things go out of sight during a move like what we saw happening in cotton for example.<br /><br />Puts generally will not rise at the same rate as the calls unless there is extreme volatility in the sense that the market is making big intraday swings back and forth or up and down. That is not the case with what happens in a CSF where the price rises and does not look back. In other words, when the market is basically a one way show, the puts will have a smaller delta. As to what exactly that might happen to be, I really cannot say with any degree of accuracy. It depends on the market and what is moving it.Trader Danhttps://www.blogger.com/profile/05484363461047659198noreply@blogger.comtag:blogger.com,1999:blog-1708908742323002823.post-8408716020495553532011-02-21T10:58:07.071-08:002011-02-21T10:58:07.071-08:00Is this true, no price move limits, of the SLV ETF...Is this true, no price move limits, of the SLV ETF too Dan? Thanks.Much4Himhttps://www.blogger.com/profile/06303052536640269238noreply@blogger.comtag:blogger.com,1999:blog-1708908742323002823.post-4783137825724259822011-02-21T10:30:11.304-08:002011-02-21T10:30:11.304-08:00Dan,
Great insight, I appreciate it all.
I'm...Dan,<br /><br />Great insight, I appreciate it all.<br /><br />I'm curious, if you or any readers could offer some color, on what happends to the options market during a move like you've discussed.<br /><br />I'm curious what the options would do, on say, day 2 of what eventually becomes an 8 session limit up move. Obviously, IV explodes, but do they start foreshadowing the peak price to come 8 days away? For instance using the limit price as a datum, do at-the-money puts start moving with say a delta of 0.45? 0.35? While the ATM calls start moving with a delta of 0.55, 0.65? Does put-call parity go out the window? <br /><br />During the initial phase of a limit up move, can you tell how bad it's about to get by looking at a disconnecting options pit, or does it disconnect at all? Relative to normal liquidity, are options liquid during the move? What happends to Option Open Interest?<br /><br />Any insight would be great. Thanks,<br /><br />Jeff McLartyJeffrey McLartyhttps://www.blogger.com/profile/06867291609706194522noreply@blogger.comtag:blogger.com,1999:blog-1708908742323002823.post-73662574559785841082011-02-21T10:02:52.117-08:002011-02-21T10:02:52.117-08:00Dan,
Really appreciate the post and response to m...Dan,<br /><br />Really appreciate the post and response to my question on limits. Have been a follower of your work on JS Mineset since '05.JesusfreakinCOhttps://www.blogger.com/profile/05018543043430354130noreply@blogger.com