|   FM Home  |   FM Forum  |   FM News  |   FM Blog  |  

Go Back   Finance & Money Forums > Finance > Investing

Investing General discussions on investing and investments: shares, bonds, commodities, forex, and funds.

   
Reply
 
Thread Tools
  #1 (permalink)  
Old 03-22-2006, 10:19 PM
madden1962 madden1962 is offline
Junior Member
 
Join Date: Mar 2006
Posts: 1
Default Lowering prices on stock options?

Do market makers keep stock prices artificially low in the week just before the options expirations date? Simply because someone told me about this and I wondered if it might have a major or minor effect on stock prices?

If they do have a lowering effect on the stock price, it would seem the
logical thing to do would be to buy options that expire after the upcoming
expiration date during the period just before the upcoming expiration date.
Reply With Quote
  #2 (permalink)  
Old 03-22-2006, 11:36 PM
Finance Admin's Avatar
Finance Admin Finance Admin is offline
Administrator
 
Join Date: Mar 2006
Posts: 52
Default Re: Lowering prices on stock options?

Hi madden1962 and welcome to FM.

As for your question - if you're talking about stock options then why should they share any bias toward call options? If a stock has a large open interest on puts, then wouldn't the market makers do the opposite of what you suggest?

I guess if you really wanted to test this you could do so easily enough yourself - just look at what the underlying tends to do right after option expiration, and see if it's statistically different from what the underlying does at any other time.

Hope that helps.
Reply With Quote
  #3 (permalink)  
Old 03-27-2006, 03:56 PM
Florida Jake Florida Jake is offline
Junior Member
 
Join Date: Mar 2006
Posts: 19
Default Re: Lowering prices on stock options?

If its fishy and possible, the brokerages are doing it.
Reply With Quote
Reply


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off


All times are GMT +1. The time now is 07:28 AM.


Powered by vBulletin® Version 3.6.8
Copyright ©2000 - 2007, Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.0.0 ©2007, Crawlability, Inc.

© 2005-2006 Finance Markets. All rights reserved  |  About  |  Disclaimer  |  Resources  |  XML Feed  |  Contact us