HOT TRADING STRATEGIES FOR A COLD MARKET
Daily Stock Market Equity and Options Trading Commentary

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Thursday, February 5, 2009

Top 10 Option Contracts Traded 2/4/2009

Today the top ten option contracts traded (puts and calls) were as follows:
1: QQQQ FEB 30 PUT
2: QQQQ FEB 29 PUT
3: TGT JAN 45 PUT (LEAP 10)
4: XLF MAR 7 PUT
5: SPY FEB 84 PUT
6: QQQQ MAR 28 PUT
7: SPY FEB 85 CALL
8: XRT FEB 19 PUT
9: QQQQ FEB 31 PUT
10: SPY FEB 80 PUT
As you can see most people (today) were betting on the market to go lower in the months to come. But after yesterday being so bullish on financials it does not make a great deal of sense. I think we will have to study the options activity for the next few days to get a better sense of which direction the market is heading. It looks as if most people think the Nasdaq is way over bought.

One great strategy is to check all the activity on options daily and see where people are placing there bets for that stock. For example: say someone thought SPY would be at 85 by Feb expiration (7th most traded contract), well it is at 83.33 so if one would pay the premium and get the rights to the stock at 85 it may be worth the investment if you want to follow the options market (which has been quite accurate lately).


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