Tesla
שורט

Using option data to forecast the underlying asset price

מעודכן
Tesla will end the week between the Red and yellow lines!



What Is Max Pain?
Max pain, or the max pain price, is the strike price with the most open options contracts (i.e., puts and calls), and it is the price at which the stock would cause financial losses for the largest number of option holders at expiration.


The term max pain stems from the maximum pain theory, which states that most traders who buy and hold options contracts until expiration will lose money
For max pain: You expect his hedging activity to drive the stock price to that point.
Open Interest walls or OI walls are a similar concept to max pain. Both rely on the option writer, which is the market maker, hedging the options he wrote.



An option wall refers to a large delta-adjusted open interest on a certain strike. It is simply the open interest for that strike multiplied by its delta. It is important because it tells us how many shares market makers need to buy or sell to remain delta neutral. Market makers typically make money by harvesting exchange rebates or by performing arbitrage trades. As such, most do not have a directional bias in the market and strive to remain hedged or flat.

The mechanic of delta-neutrality is simple. For instance, if a market maker sells a call option on SPY with a delta of 0.90, it will need to buy 90 SPY shares to remain delta neutral. As the delta-adjusted open interest builds up, so does the number of shares held by market makers. When close to expiration, a large number of these call options will be sold by investors, forcing, in turn, market makers to sell their shares. Therefore, if the market is above a large call option wall, it will create selling pressure as expiration approaches. This will preclude the price from freely moving upwards. The same goes for put option walls, but they instead create buying pressure.
הערה
having said that any price above 1100 USD could be another good short opportunity!
A Bearish Channel or A bullish Flag???
הערה
Push the Play button and see Tesla at the center of the target..!
עסקה סגורה: היעד הושג
moshkelgoshaTrend AnalysisTesla Motors (TSLA)

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