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Look Out Below – ISEE Call to Put Ratio Hits Record High of 278% QID Above 18.46?
What a difference a day and another dollar can make.
Over the weekend we posted the ISEE Call to Put Volume Opening Ratio from the International Securities Exchange, the world’s largest equity options exchange.
ISEE hit a new yearly Friday New Year’s Eve opening low of 21 for Market Indices and Exchange Traded Funds. This meant for every 100 puts bought on ISE, there were just 21 calls bought.
http://www.ise.com/WebForm/viewPage.aspx?categoryId=126
Option buyers have a long history of losing money, so they can be a contrary indicator, buying calls at tops and buying puts at bottoms.
ETFs can be risky, rewarding and volatile. They may use time-wasting derivatives like options. Their leverage can make them geometrically compound toward zero or infinity if they are reallocated every day, week or month and the market trends longer. Read the prospectus or visit the website to find out. EFTs are popular and doubling in new offerings, suggesting another bubble top may be coming with ETFs.
More to the point, we posted this weekend an ultra low percentage of call buyers maybe indicated a market bounce.
Today we saw the market bounce with a new yearly ISEE high of 278 equity call to put buyers, quickly suggesting a pending market top.
http://www.ise.com/WebForm/viewPage.aspx?categoryId=126
Please note we are not short-term market timers or traders, having lost a lot of money attempting both. We just don’t like to see bloody slaughters in the Wall Street Casino, including ourselves, so we share some of what we learned the hard way from the markets to be of charitable service.
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