Observations, week of June

Last week i decided to take a step in my journey into options by buying Puts and Calls for SINA, a stock that has been going down since i initially bought some assets of it around $135.

In particular the last two weeks were really horrible as right after a small rebound, it went up to 125, then crashed in a couple of days to 90$ then 80$.

Effectively the “Sellers were in control” at that time. This was clear with options too, where there was an extremely high volume, that brought the average up by more than 3 milllion in a couple of weeks, from 7M to 10M.

In this kind of market where sellers are in control, i realize that it was not a good idea to buy option puts or calls, as neither really went in the money long enough. Sellers were keeping the spikes small until the expiry of my option.

The current market, the week after the expiry of options for june, is one that is marked by a big spike in tech stocks including RIMM and SINA, where sina gains 16% in a single day, RIMM over 6%.

So clearly these are fairly predictable markets and should have been noted.


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