Reality Lenses: Option buyers are on the biggest call buying spree of the past 3 years

2011-06-27

Option buyers are on the biggest call buying spree of the past 3 years

The put/call ratio is showing us that option traders are yet again on a call buying spree. So much that within just a few days, the 5 day moving average has reverted to its 3 year mean.

I hesitate to call it the biggest call buying spree in history, but I do not have the time to chart the long term graph.

This is quite an amazing chart, as it looks like the biggest call buying spree of the past 3 years, including during the greatest dead cat bounce in history. Yet, markets have not rebounded.

Here are the 5 year chart of the VIX and VXO (log scale). Do you see any panic?

6 comments:

Anonymous said...: You are the best contrarian indicator ever.

When you turn bullish, I will know it's time to sell out of the market for another financial crisis.

Thank you.; 28 June 2011 at 10:42
pej said...: Dude, please do as you please.
My track record is pretty good so far, but I'm curious about yours.

Commenting as Anonymous doesn't show a lot of courage...; 28 June 2011 at 11:18
Tiho said...: Binge buying in calls?

How did you come up with that?; 29 June 2011 at 12:40
pej said...: see the collapse of the 5 DMA of the PC ratio? It means call buying has been very much higher than put buying, during the past 5 days — at the time when this chart was taken.; 29 June 2011 at 16:27
Tiho said...: This comment has been removed by the author.; 30 June 2011 at 04:01
Tiho said...: Hahahahaha! Are you serious dude? You arent joking are you?; 30 June 2011 at 04:04