The indices are holding in positive territory, but what's interesting is that the put/call ratios have been running higher all day today than they were at any point yesterday.
The equity-only reading is 1.10, and the p/c on index products has been running around 2.25. While I'm taking this as a moderately contrary and bullish sign, it also points out that one should be careful before reading too much into intraday numbers. For example, the most active puts are in the Russell 2000 iShares (IWM - commentary - Cramer's Take), which saw 45,000 of the June $71 puts trade. This could be one of three things: Someone could be buying protective puts, but it's more likely a closing transaction, though there is also a chance it could be an opening sale.
Likewise, in the Spyder Trust (spy - commentary - Cramer's Take), the most active strikes are in the near-term June puts and represent volume well below the strike's current open interest. The one trade that looks like an opening transaction is the August $119 and $126 puts which each traded 10,000 contracts. But this is a spread, and those trades are less indicative or useful for gauging sentiment than knowing if a trade is an outright purchase or sale.
P.S. Will you be there when Cramer makes his next move?
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Steven Smith Blog Cast Wary Eye on Intraday Numbers 6/7/2006 2:16 PM EDT They don't always give you a true idea of current conditions. Like now, for example.
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Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
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