Here comes Elmer!
"The name's Francis Sawyer, but everybody calls me Psycho. Any of you guys call me Francis, and I'll kill you. I don't like no one touching my stuff. So just keep your meat hooks off. If I catch any of you guys in my stuff, I'll kill you. And I don't like nobody touching me. Any of you bozos touch me, and I'll kill you."
--Frances, I mean "Psycho" Sawyer, Stripes
A quick little blurb before we start the Minxtown shuffle. A Minyan pinged me and asked if that monster S&P put buyer could possibly be setting up gamma (rather than making a directional bet). The answer is a definitive YES. We've seen volatility (options) to buy all over the place today--a couple thousand BKX straddles, oil service premium, QQQ paper and more.
While the volatility indices (VXO, VXN, QQV) are up marginally (and were up yesterday), the flow is a bit more pronounced. Further, the stochastics for these indicators have all triggered buy signals. They're not necessarily timing mechanisms (see the broader averages the other way) but it's worth a mention nonetheless.
What is gamma? Professor Succo--who I consider to be the best option trader on Wall Street--has written excellent tutorials that lend themselves to our educational mission. If you haven't seen them, print 'em out and take the time to give 'em a good read. As you know, these are uber-risky vehicles and they're surely not for everyone but that doesn't mean we can't further our knowledge base.
That is, after all, what Minyanville is here for.
Good luck with Elmer.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter