800 lb gorilla in the room

If I step back and look at the S&P, the next 'obvious' target appears to be 800.

In the near-term, a bear market rally is highly anticipated and likely but in the longish-term, heading down to 800 seems like the path of least resistance, yet hopefully it will act as support.








In the interim, I see two options.

1) Buy some Calls with the inevitable (eventual) bounce and hope that there is no volatility crush (when IV drops in dramatic fashion along with the value of your options) and/or in the very short-term, hope that you can sell your overpriced calls for more than you overpaid for them.

2) Start making a list of optionable stocks that bounce too much and thus setup a great Put buying opportunity. Hopefully at this future time the options market will start to resemble normal.

I SPY

SPY

Oh, stupid July

If you had bought the SPX one month ago, your daily changes for the month of July would have looked like this. If you were smart enough to remain on the sidelines, as I did, self-congratulate yourself.

And if you actually made money while being able to sleep at night...kudos.

Losers of any game typically lament that either the game was rigged or it is one no one can beat; thus, their failure is excusable.

~ Larry Williams

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Open Interest ahead of the Fed

Not everyone is on the sidelines to 'wait and see' what the Fed does. Here are a couple of screenshots that highlight open interest at a critical time (rate cuts, S&P at 1400, etc).
1) A list of stocks with the highest open interest
2) A list of options with the highest open interest

The difference is that the first list shows the total open interest of all options associated with the stock (i.e. S & P 500 INDEX). The second list shows the specific option in the option chain with the highest open interest (i.e. SPY MAY 132.00 P).

The first list can be used to get an idea of what stock/index option traders are hedging/speculating on, while the second list can sometimes provide an idea of the magnitude in the expected move of the underlying - think back to March, when there was an explosion of deep out-of-the-money BSC Puts.