Option traders were treated to an unusually active end of summer. According to the Options Clearing Corp., option volume during the week before Labor Day, usually among the lightest of the year, saw 28.7 million contracts trade, or some 5.6 million contracts a day. That's a 39% increase over the same week a year ago and greater than the year-to-date average daily volume of 5.5 million contracts.Typically an increase in volume is interpreted as a bullish indicator, as more interest, more speculation and more liquidity are necessary to drive and sustain higher prices. But despite last week's surprising surge in volume, recent option activity is not presenting an entirely bullish picture. In fact, the last two sessions, in which we are supposed to see a post-Labor day pick-up, have seen a decline in trading volume, suggesting a lack of commitment from investors.
Option Action Lacks Conviction
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