Tag Archives: Market

Option Pinning …

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Option strike price sometimes has interesting effect on the market during option expiration week. Looking at MSFT chart, we can see it slides towards 25. Based on the option trading volume data at Yahoo, there were 10,791 contracts (Apr04 25 Call) changing hands with 79,265 still outstanding, the heavest traded strike today. For premium sellers, it’s to their advantages to let the contract expire worthless, which means in this case that MSFT has to go below or at 25 to let Apr04 25 call contracts expire worthless. I have a small long position where I had sold some at 0.95-1.05 earlier and hold some until today I sold them at 0.7.

QQQ Bounces back …

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As expected, the good economic news has pushed the market across the board higher today. QQQ closed at 35.34. The volume is higher, but not very high. The resistence is now 36 and support is 34. Interestingly, the intraday high was right below the SMA20, which acted as the resistence at current level. The market is still weak, we shall see if the 34 is the intermediate bottom.

QQQ

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QQQ moves up a little, but it needs to take out 35 to reverse the slide started two months ago. If the rotation of big money out of tech stocks has come to an end, it may go sideway for a while. Any good news probably will invite some to jump back in the market. Anyway, it has to hold the 34 support level firm, next support is at 32.5.

SOHU

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SOHU closed above the 20SMA in average volume. It looks good to break the resistence at 30.

I will watch it closely this week and plan to close half of the position if it crosses 30 intraday to book some profits in case it pulls back below 30.

The current open interest in Mar 30C is 7,839, which is not very big. I’m not sure how market markers will play near expiration days (roughly two weeks away). For premium sellers, they would love to let Mar 30C expire worthless and they can sell Apr 30 C and 35 C again.