Hm......relatively good jump in late after hours. Let's see if the Max Pain conspiracy is true. Further, what's to say that the max pain won't limit next week's price too? I first heard about max pain this week from you guys, so now I wonder how far reaching it is and has been.
Remember that next week NASDAQ is closed on the 27th.
It isn't an exact science... The only thing you can be sure about is that you can't be sure about anything... That is why many people associate options trading with gambling... because there are a lot of uncertainties and things that can mess that up.
That being said, quarterly and monthly expiration dates would have a more likelihood of manipulation since there is a LOT more money being staked on those option chains.
What I have seen happen in the recent past, when we threw around this "fixed price" theory, was that they kept it flat up until Thursday and then released the stock to let it do its thing. But that was the week of the D announcement and there was so much unknowns about how that would go down and the affect it would have on the market that they likely knew they weren't going to be able to hold the price through the event and bailed on their positions.
Today what is going to mess with the theory is the Macro events going on that is raising all boats on the water. It is very hard for these guys to manipulate a decently expensive stock when too many people start jumping in and trading. If you will notice Wed when the price dropped they used moderate volume to dump the stock down and then it tapered off in the afternoon. Not all of that volume on Wed would have been from the people manipulating the stock, but rather them using the power of FUD and a gap down to scare more people into piling on the sell-train, then they just held enough pressure through the day to keep it down. On Thurs we had lower than average volume (by a decent amount) which makes it a lot easier to manipulate the price, because there are fewer buyers it won't take much selling to keep the price down.
Anyway, that is how I see the tea leaves for what happened, why it happened, and what to expect for today. As for how to trade this? Well, I couldn't tell you, because both things were not really something that you could "forsee". At best, what you could have done, is pay attention to the max pain mark on Monday, have bought some puts, and then as soon as we hit 246 something sold them off. The negative news story would have been the needed catalyst to drive the price down, but you would have expected it to be FUD manipulation. Once it hit 246 assuming that whatever the news story was you would have looked to counter that with a new play that would re correct for the FUD as the market pulls the price back where it should be.
If you want to play around with that theory, I recommend we bring this up again in December the week before the core December options expire because that will be both the Monthly AND Quarterly option expirations. Your odds are more in your favor to see this pan out again.
