Where were the bears and bulls on Aug 5th?

by Raymond Chan 08 August 2011

With the S&P/ASX200 (XJO) falling 4% on Friday 5 August, the Australian options market experienced one of the highest volumes in a day with more than 1.5m options traded.

The 1.5m equity options traded on Friday was a 95% increase from the day before. This is a big jump compared to volume in equities, which were higher by (only) 34% in comparison.

I was expecting a very bearish overall put call ratio on equity options on the whole due to fall in the market, but it came in at 1.68 times, showing that puts on equities definitely dominated trades on Friday, but there were still some nibbling of equity calls options for individual shares.

In terms of the index options, it was a bit more bearish with the put call ratio on index options coming in at 2 times, with 2 index puts index options traded for every 1 call index options.

Some of the bears and bulls on Friday were:

Ranked by the worst put/call ratios (3 or 4 times more puts than calls) and in the order of the highest puts volume traded, the options bears were all over WPL, MQG, AMP and QBE in descending order.

On the calls side, with the ranking of the best calls to puts ratios (1 to 2 calls traded for every put) and in the order of the highest calls volume traded, some optimism were seen in NCM, STO, IPL, OSH; with AMC and AIO and BXB the low volume picks.

Disclaimer

Information/strategies/trading ideas in this blog is provided for general information purposes only and is not intended as an offer to enter into any transaction. Information contained in this blog is not necessarily complete and its accuracy cannot be guaranteed. Information/strategies/trading ideas here have been prepared without consideration of the investment objectives, financial situation or particular needs of any individual investor. Before a client/investor/reader makes an investment decision, a client/investor/reader should, with or without RBS Morgans' or the author’s assistance, consider whether any advice contained in this blog is appropriate in light of their particular investment needs, objectives and financial circumstances. It is unreasonable to rely on any recommendation without first having spoken to your adviser for a personal recommendation. The use of options may not be suitable for all investors. Potential investors are recommended to seek professional advice before embarking on any strategies mentioned in this blog. The information/strategies/trading ideas contained in this blog have been taken from sources believed to be reliable. Neither the author nor RBS Morgans Limited represent that the information is accurate or complete nor should it be relied upon as such. Any opinions expressed reflect the author’s judgment at this date and are subject to change and is not necessarily that of RBS Morgans'. RBS Morgans and/or its affiliated companies may make markets in the securities discussed. Further, RBS Morgans and/or its affiliated companies and/or their employees from time to time may hold shares, options, rights and/or warrants on any issue included in this blog and may, as principal or agent, sell such securities. The Directors of RBS Morgans Limited and Grosvenor Sydney office advise that they and persons associated with them may have an interest in the above securities and that they may earn brokerage, commissions, fees and other benefits and advantages, whether pecuniary or not and whether direct or indirect, in connection with the making of a recommendation or a dealing by a client/investor/reader in these securities, and which may reasonably be expected to be capable of having an influence in the making of any recommendation, and that some or all of our representatives may be remunerated wholly or partly by way of commission. Information in this blog is proprietary to its author and may not be copied as your own or used for any other purpose without the prior written consent of the author. RBS Morgans Limited (ABN 49 010 669 726 AFSL 235410) A Participant of ASX Group Principal Office: Level 29, Riverside Centre, 123 Eagle Street, Brisbane QLD 4000
 

Subscribe to our Daily Newsletter?

Would you like to receive our daily news to your inbox?