I think even over 100 was very rare. What’s going on here? Anyone saw things like this before? Forgive me, I’m new to ISEE index so if it’s normal, don’t laugh at me, after all I’ve been providing kind of entertainment every day…
Disclaimer
The information contained on this website and from any communication related to the author’s blog and chartbook is for information purposes only. The chart analysis and the market recap do not hold out as providing any financial, legal, investment, or other advice. In addition, no suggestion or advice is offered regarding the nature, profitability, suitability, sustainability of any particular trading practice or investment strategy. The materials on this website do not constitute offer or advice and you should not rely on the information here to make or refrain from making any decision or take or refrain from taking any action. It is up to the visitors to make their own decisions, or to consult with a registered professional financial advisor.
This websites provides third-party websites for your convenience but the author does not endorse, approve, or certify the information on other websites, nor does the author take responsibility for a part or all materials on the third-party websites which are not maintained by the author.
Just noticed the same thing, I only look at daily summary each day, sometimes look intraday and also first time seeing such a spike!! I though it was data error at first, however after next update it seems not??
ReplyDeletewhat does ISEE mean? High number for bullish or bearish?
ReplyDeletehttp://www.optionmonster.com/news/article.jsp?page=commentary/in_the_news/huge_spy_trade_hits_36883.html
ReplyDeleteIt's not every day you see a 448,000 lot, but today we have.
This morning brings the single largest trade I have ever seen -- approaching 900,000 contracts -- in a complex volatility play.
In one trade of single blocks, executed all at the same time, an institutional trader sold 448,014 of the S&P 500 ETF (SPY) August 100 calls for 1.39, bought 298,676 of the October 106 calls for 1.37, and bought 149,338 of the September 103 calls for 1.51. All told, that is
896,028 contracts!......................
TDI,
ReplyDeleteThanks for sharing. So does it mean that big players are still bullish for intermediate term?
TDI100, thanks for the info.
ReplyDeletePivot Trend, ISEE number = Call/Put * 100. So high number means more calls.
since today is more of an anomaly, one should not short based on ISEE > 100 (or 110)?
ReplyDeleteShort only when ISEE Indices & ETFs only index CLOSED > 100. So now, we don't know yet.
ReplyDeleteMight been a data error, it happened once before... but if this data is true, sh** market should be in deep sh**...
ReplyDeleteFrank
Frank, it's not data error. Someone did bought lots of calls.
ReplyDeleteCobra, thx for confirming that, oh sh**, I think this going to be ugly... some retailer is betting the whole farm + max credit card + max house equity line + brother/sister/mother/father money into this fall?!
ReplyDeleteGod help him/her...
Frank
Frank, it's a big money who is trying to protect himself on the downside, so I'm not sure if we should treat today's above 100 readings (I'm sure ISEE will close above 100) as bearish for the next 2 days.
ReplyDeleteLooks like the problem between chair and the keyboard.
ReplyDelete>>SPY trade was busted
http://www.optionmonster.com/news/article.jsp?page=commentary/in_the_news/spy_trade_was_busted_36890.html
TDI100, how can you tell it's a single player, and how can you see what they did, per trade?
ReplyDeleteDoes this mean they think the market is going down big time? Or does this mean they are heavily short via shares, perhaps?
New to options, and trying to understand.
Thanks.
Here is the whole article
ReplyDeleteIt's not every day you see a 448,000 lot, but today we have.
This morning brings the single largest trade I have ever seen -- approaching 900,000 contracts -- in a complex volatility play.
In one trade of single blocks, executed all at the same time, an institutional trader sold 448,014 of the S&P 500 ETF (SPY) August 100 calls for 1.39, bought 298,676 of the October 106 calls for 1.37, and bought 149,338 of the September 103 calls for 1.51. All told, that is 896,028 contracts!
This is a diagonal spread that will profit if the most is the SPY remains at 100 until expiration. But the trade is protected to the downside, and increased implied volatility will increase the profits to the downside. The trader may well be bullish, but not in the near term, and using this strategy to get into the long calls in a highly leveraged way.
If I have calculated correctly, the debit on this trade is a little less than $2 million. The trade will gain roughly $50 million if the SPY is at 100 at expiration. SPY would have to drop 20 percent to produce a loss to the downside. But if the SPY goes above 102, losses will accumulate quickly.
Most traders get out of these positions at or before expiration, but then again, most traders do not play at this scale.
Looks like the took off the large option trade, but maybe it distorted the index?
ReplyDeletehttp://www.optionmonster.com/news/article.jsp?page=commentary/in_the_news/spy_trade_was_busted_36890.html
Dear Dan Black: you're getting your market crash today according to some cycles you were trying to follow.
ReplyDeleteCobra, thanks for posting that.
ReplyDeleteThanks again!
ReplyDeleteWell, I don't know, maybe I missed this earlier or someone may notice here already, but now ISEE is saying data is incorrect...
ReplyDelete"Please note: The ISEE values are currently incorrect due to a busted trade. The values will be corrected after the close."
Frank
Thanks Frank, I just saw that. We'll wait till the close then.
ReplyDeleteHi Cobra,
ReplyDeleteBoth the SP500 and the VIX closed lower on the day.
I am biased for an UP Monday 08-17.
Tues 08-18 is my next 3 wk cycle (likely pivot) date,..and I expect Tues 08-18 to mark a Turn Down from a High on Mon 08-17.
Regards, Jim P.
Also, BKX (Banks) managed to close UP on the day,..and XLF (Financials) outperformed the SP500 on a down day.
ReplyDeleteMarket leadership intact, also in support of an UP day on Monday.
Regards, Jim P.
Jim, we'll have a green Monday. Have a nice weekend! Oh, thank you for everything!
ReplyDeleteHey cobra
ReplyDeletehow can we have reliable put/call information during the session, in order to position before the close to the next day ?
thanks
You cannot, so you have to make a little bit guess, or trading in AH. Also the values I'm using now for determine the next day's trend are for NOW only, they don't work forever.
ReplyDeleteHi Cobra,
ReplyDeletenot sure if I'm understanding completely so to clarify, are you saying that the data above points to a short term bearishness coming soon? But you are expecting a Green day and close on Monday? Thanks!
You're welcome Cobra.
ReplyDeleteYou too, ..have a good weekend.
Regards, Jim P.
gordongecko, I assume you mean ISEE index? I'll have to take a look at this part later because right now the data is wrong (as ISEE said no its web site), so I have to skip the ISEE index. Just from the other data I see a good chances of a green close next Monday. So for now, I say green Monday, but maybe I'll change mind later.
ReplyDeleteThanks Cobra,
ReplyDeleteyou are the bomb diggity~! in other words you rock! Been following you since last winter and your calls have been on point all week long!
@In one trade of single blocks, executed all at the same time, an institutional trader sold 448,014 of the S&P 500 ETF (SPY) August 100 calls for 1.39, bought 298,676 of the October 106 calls for 1.37, and bought 149,338 of the September 103 calls for 1.51@
ReplyDeleteWhat I read from this is that scenario to profit the MOST with this position is for SPY to plunge below 100 into the end of August and then go to new highs by October.
Am I right?
Best if SPY closed around 100 on OE.
ReplyDeleteEVERYBODY RELAX... THE TRADE GOT BUSTED!
ReplyDeletehttp://www.optionmonster.com/news/article.jsp?page=commentary/in_the_news/spy_trade_was_busted_36890.html
SPY trade was busted
August 14, 2009 Fri 11:18 AM CT
Well, what do you know. The large SPY trade was busted, meaning that the trade was broken -- essentially the same outcome as if it never happened.
It is hard to tell exactly what took place. Maybe someone slipped in an extra digit into each leg of the trade?
As it stands, it looks like someone has still put on the diagonal trade we described, but definitely in smaller size. The trade does have a bearish overtone, at least in the short term, but the trade size does not have as much of an effect on the market.
Correct me if I am wrong, I haven't seen the math or definition of the ISEE in a long time so I am doing this from memory.
ReplyDeleteIt is my understanding that the ISEE EXCLUDES institutional investors and takes retail investors into consideration only.
Therefore, the above mentioned trade should not have an effect on the ISEE anyways.
Isn't this correct?
ISEE is about buy to open only (call/put) so it should include institution. Just it doesn't include sell to open, so ISEE index is more straight forward.
ReplyDelete