A near-record number of options will expire today — a bazillion dollars’ worth at last count, including a preponderance of out-of-the-money puts — prompting ZeroHedge and some end-of-days groups to predict something far more dramatic than the usual Friday follies. Typically, the greater the number of speculators who are focused on such things, and the louder they beat their drums, the more disappointing the actual event. Still, the market has been pretty excitable lately, and so we shouldn’t be too surprised if a little ‘X-factor’ added to the brew causes something memorable to occur. If, as has been reported, a vast number of out-of-the-money puts are about to go out worthless, we wouldn’t necessarily see the effect right away. Rather, because those puts offer protection of a sort against a market crash, we might expect to see selloffs in the future that are more violent, and which last longer, than usual.
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Zerohedge site is a Bloomberg covert site, suggest the ‘other’ side of the trade site. How is this suggested? Because every once in awhile Bloomberg simply suggests reads on air from the site.
Oh what a world we live in.!!
But, much as what you suggest is quite true for a very short term direction.
Barron’s this last week says it all. Downward we go..
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A ‘covert’ Bloomberg site? I’d like to see the evidence. It’s hard to believe, since the two are so different philosophically. But even if it were true, would it matter? ZeroHedge is what it is no matter who is behind it; you can choose which stories to believe regardless of their source. Personally, I think ZeroHedge’s reportage gets a lot closer to the Big, Ugly Truth than Bloomberg’s. The latter just reports the “facts” without seeming to understand even slightly that they point toward disaster. RA
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