Friday, March 19, 2010

The Daily Note - The Unpredictable/Predictable OPEX Day

I seem to recall that somewhere in my fuzzy brain there is a file drawer with all the discarded op ex trading days. I think it's marked with "DO NOT TRADE" or "WASTE of TIME" . Obviously I have not learned the lesson well enough yet, because I keep trying and at the end of the day I wonder why I did, yet again. It is an exercise in watching paint dry, grass grow, all in the actual knowledge, again a faint reminder, that all is over within the first hour or so, and the rest is just flat line activity.

So then, the predictable part for me on OPEX day is that the opening minutes lasting about 30 minutes to an hour, consist of inflation to find a range/direction, the next hour or so is deflation, to settle into the range and the rest of the day is a flat.

Very seldom is there any real discovery of actual market direction, it is all about market control. A predetermined desire of where most of option trades will price for maximum profit. Since I am not an options whizz, and I'm still learning, I cannot say really how or where it is determined so to me, that is unpredictable. What is also in play is that there is other news which could effect the market more readily were it not for OPEX, therefore, the Monday following OPEX becomes more unpredictable.

It is not to say there is no trades that are profitable, but I did learn to put my expectations in a tighter range.

Happy Trading, Living and Dancing

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