"Can you provide the names of the top 5 institutional traders that raise red flags as predators?
What levels of option open interest and implied volatility raise red flags"
- Predator Patrol - Top 5?
Although I have my personal list of the Top 5, I want to sound a Caution Bell on the subject.
Certain Predators hunt certain Prey.
As in... these Predators will make a point of concentrating their research (and investment dollars) in particular stocks.
Best way to get a quick survey of who is out hunting is to get to the Lists of Tute Ownership where BOTH share and option positions have been established.
Here's a link a listing of Ziop Tutes -
If I were to write a textbook on the financial Killing Fields, Ziop would be the Poster Child.
See SIG? ( Susquehanna investment group) ?
When you see them in the Top Ten, drop what you are doing and go out and buy
Long Term Care Insurance.
Your portfolio will thank you.
(Here's a bit of observation from16 years of seeing "SIG' at work-
All the major Most Posted To and Most Followed Stocks on Investor Village have been whipped , tortured and transformed into blood bags by SIG.
SIG was the first major player to incorporate algorithm trading.
ELN, DNDN, RMBS,VHC, ZIOP and several others have all had the privilege of being SIG
Any way, study the Tute Lists. It's the fastest way to start to identify which "Firms" have Charters with the tools of unlimited warfare written in to them.
(Wait.... et tu, Citigroup?)
Now, a shallow dive in Options explanations -
Okay, you want to blow the lid off your mind?
Give up watching the overall Market for about 200 man hours.
Instead, invest all that time in acquiring a Black Scholes Option pricing calculator and then running many Scenarios of Option pricing at 3, 6 and 12 months into the future
based on your PPS estimated.
Start with a decent Delta of, say .70 and a resting pulse rate Implied Volatility around, say .70 as well.
Then, keeping the Delta value the same, start raising the IV by 10 points at a time.
Go from an IV of .70 to .100 to 130 to 1.20 and so on.
By the time the IV reaches 100, you will sweating profusely and your body will feel like
you have exerted yourself to the point of being winded.
At 120, your respiration and pulse will be demanding some form of medical intervantion
At 200, blood will be seepingspontaneously out of your eyes and the Producers of 'House, MD" will want you for a reboot.
And what will you learn, precisely?
That the REAL money ain't in shares.
The real money is in the Options.
Shares are basically there as sacrificial pawns; to be used in amounts necessary to move a PPS towards a destination that drops monstrous , obscenely huge profits on
the 'Da Boyz" ( men, women and children) who
are willing to invest a modicum of intellectually rigorous analysis.
Option Open Interest -
This one is notoriously hard to decipher. One thing for sure, you see daily volume of
500 or more Call contracts, you need to take note.
But before publicly commenting, you need to wait for the Open Interest sport the next day to interpret wither some, or all, of those contracts were BTO or STO or BTC of STC.
And that's where Implied Volatility readouts help.
Hi IV, large number of contracts. Odd how often that is a Big Boy taking the money and running.
See it across almost all the MB's I visit for years now.
Somone sees a large volume of option contracts go off and instantly thinks that it a "bull" signal for that strike.
What's that 2 Stooges laugh sound like ?
"Nyuk, Nyuk, Nyuk" ?
Learning about options is like becoming a parent.
Someone can talk you to death on the subject and you don't really GET IT until;
you have actually committed yourself.