Yesterday in a scheduled Question and Answer session, Federal Reserve Chief Benjamin Bernanke dropped a number of dovish signals implying that the Federal Reserve’s unprecedented programs attempting to maintain financial stability will likely continue. The Fed is also wary of signs of weakness, and willing to keep the programs going longer than originally planned if […]
You all know what time it is! It’s time to parse the option trader tea leaves and guess where the options market thinks we are headed in the near to somewhat not near future. As always, we are taking options data from Yahoo, and using contracts which trade more than .5% of the daily volume to make our targets. We’re also using the ticker SPY (a S&P 500 ETF) as our proxy for the S&P – all numbers you see are multiplied by 10 to get the conversion to actual closing prices.
Don’t Quit Your Day Job is a site which varies between many types of articles – Personal Finance, Politics, Investing, Economics, Random. One of those categories, Investing, has been given short shrift in order to make way for more articles in the other categories. Today we plant a stake; ‘Investing’ will now have a featured article monthly, where we’ll use options to try to determine the outlook for the S&P 500 in the near future. Since this is the first article, let’s discuss the method we will use to predict movement.