This is one of the most important "hidden" indicators in the options market, although it is unknown to 99% of stock traders. How sizzle index can help you?
2. One of the most important
"hidden" indicators
This is one of the most important "hidden" indicators in the options
market, although it is unknown to 99% of stock traders.
There is a cliché in the market: "Follow the smart money".
Smart money refers to, for example, the investment funds that trade in
large quantities. In many cases, it is totally hopeless to predict the
movement of a paper on the basis of chart formations.
However, those who play with large amounts - ie. smart money - do
not trade the movement of the paper only with the underlying product,
but with options as well.
But how do you know to which options of which paper
the money flows into?
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3. What is sizzle index?
"The sizzle index is the current volume of all options for the
underlying product divided by the average of the total
volume of options in the past 5 trading days .."
In other words, if the value of the sizzle
index is bigger than one, the total
option volume on the underlying
product today is higher than the
average of the last 5 days. What does it
indicate, when the value of a certain
sizzle index is 100 or higher? I leave
that to the power of your imagination :)
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4. But what is the good in all this?
It is easy to see that a very high sizzle index number
means that there is an enormous interest for certain
options of a particular paper.
This can happen even if the underlying product has not
changed. That means the market, the smart money,
started to price something. What it prices is - of course -
subjective.
The sizzle index is one of the most professional
"hidden" options indices!
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5. Feel free to ask me!
Email: gery@optionsrules.com
My webpage: http://www.optionsrules.com/
You can find me:
Facebook: https://www.facebook.com/OptionsRules1
YouTube: https://www.youtube.com/user/optionsrules
Twitter: https://twitter.com/optionsrules
LinkedIn: http://hu.linkedin.com/pub/gery-nagy/6a/513/261
Skype: opcioguru
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