Last week here I discussed the possibility for delta hedging. If you don’t understand the concept I encourage you to take the time to read about here. Although it doesn’t happen often, it’s helpful to know when it is a possibility and the outcome of it.
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Below are the stats since weekly freebie began sending emails:
- 17 wins (I only count wins when they are either big wins or where there was enough time to take profits).
- 7 that didn’t trigger
- 7 scratch trades
- 2 loss
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Open Interest: If you want more information on how to read the high calls and puts in the open interest see here.
SPY-M: (20 of 32 for pins).* The only thing that sticks out is the high 282 puts. If the market opens with a large gap on Monday I think it’s possible we get over those puts so they expire worthless. However, if we open significantly below there or the market doesn’t move quickly higher right after the open then I wouldn’t count on price closing above there at expiration.
SPY-W: (78 of 108 pins).* At the moment all we really see are puts and the highest put strike is all the way at 284. The market would really have to get a large bounce plus FOMO to get over them. Also, it’s prudent to be aware that those high put strikes might close out before Wednesday expiration. Right now there are high strikes at 280, 282, and mainly at 284. It’s definitely not impossible to imagine a large bounce getting over those puts, but I wouldn’t necessarily anticipate it unless there is evidence of a very strong bounce and chasers stepping in. 
SPY-F: (63 of 100 pins).* Friday’s expiration potentially won’t change much throughout the week because it’s a monthly expiration and those high puts were likely put on over a long period of time as a hedge. Regardless, what we see is high puts from 269 to 272, at 275 and then at 280. If price remains under 280 those sections can each be treated separately and the longer price stays under each section the more chance we could see delta hedging again and a quick move lower. If, however, price gets back over 280 it may remain there as it has good support. But with the recent volatility and all those puts, keep in mind that even if price remains above 280 for much of the week, a dip below late in the week can again lead to a swift and large move lower. 
Pinning Stuff:
*An explanation as to how I define range pinning can be found here. More information about what pinning is can be found under the education section or here.
Monday 10/8: Successful pin. In this scenario because last week I discussed that there was really no put support to stop price from falling I was going to call any close under the 293 calls a pin. 
Wednesday 10/10: Failed pin to the downside and delta hedging. 
Friday 10/12: Failed to the downside and delta hedging.
Tags: max pain, open interest, option trading, options, options expiration, options pin, pinning, S&P 500
October OPEX + Monday & Wednesday Open Interest
Last week here I discussed the possibility for delta hedging. If you don’t understand the concept I encourage you to take the time to read about here. Although it doesn’t happen often, it’s helpful to know when it is a possibility and the outcome of it.
If you have not yet subscribed to my weekly freebie you can do so below to get next weeks free trade IDEA (not alert – if you want an entry and exit alert you need to be a subscriber) sent to your mailbox Monday morning. Last week was AAPL and it never triggered.
Below are the stats since weekly freebie began sending emails:
Join SassyOptions: If you are a short term trader join us at SassyOptions Premium and take advantage of all its offerings that will help make you a better and more profitable trader.
Open Interest: If you want more information on how to read the high calls and puts in the open interest see here.
SPY-M: (20 of 32 for pins).* The only thing that sticks out is the high 282 puts. If the market opens with a large gap on Monday I think it’s possible we get over those puts so they expire worthless. However, if we open significantly below there or the market doesn’t move quickly higher right after the open then I wouldn’t count on price closing above there at expiration.
SPY-W: (78 of 108 pins).* At the moment all we really see are puts and the highest put strike is all the way at 284. The market would really have to get a large bounce plus FOMO to get over them. Also, it’s prudent to be aware that those high put strikes might close out before Wednesday expiration. Right now there are high strikes at 280, 282, and mainly at 284. It’s definitely not impossible to imagine a large bounce getting over those puts, but I wouldn’t necessarily anticipate it unless there is evidence of a very strong bounce and chasers stepping in.
SPY-F: (63 of 100 pins).* Friday’s expiration potentially won’t change much throughout the week because it’s a monthly expiration and those high puts were likely put on over a long period of time as a hedge. Regardless, what we see is high puts from 269 to 272, at 275 and then at 280. If price remains under 280 those sections can each be treated separately and the longer price stays under each section the more chance we could see delta hedging again and a quick move lower. If, however, price gets back over 280 it may remain there as it has good support. But with the recent volatility and all those puts, keep in mind that even if price remains above 280 for much of the week, a dip below late in the week can again lead to a swift and large move lower.
Pinning Stuff:
*An explanation as to how I define range pinning can be found here. More information about what pinning is can be found under the education section or here.
Monday 10/8: Successful pin. In this scenario because last week I discussed that there was really no put support to stop price from falling I was going to call any close under the 293 calls a pin.
Wednesday 10/10: Failed pin to the downside and delta hedging.
Friday 10/12: Failed to the downside and delta hedging.
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Tags: max pain, open interest, option trading, options, options expiration, options pin, pinning, S&P 500