That’s when 0DTE (zero days to expiration) option trading became popular. <\/p>\n
Traders started gambling on the intraday direction of the stock market. They bought short-dated puts and calls that expired on the same day they bought them. <\/p>\n
That action wasn’t indicative of traders’ bullish or bearish sentiment of the market. Rather, it was a gamble on where traders thought the major stock market indexes would finish the day.<\/p>\n
That activity skewed the option volumes, rendering the CPC all but useless.<\/p>\n
Now, though, the market has absorbed the allure of intraday gambling. And the CPC is starting to trigger reliable signals again.<\/p>\n
For example, in early August – after the S&P 500 had fallen 9%, and it looked like the world was ending – the CPC hit 1.28. That coincided with a bottom in the stock market.<\/p>\n
In late August, after the S&P 500 had rallied all the way back to 5650, the CPC hit 0.74. The S&P 500 dropped 250 points just a few days later.<\/p>\n
So, it’s probably worth noting the CPC hit 0.76 last Wednesday. It was 0.79 on Thursday.<\/p>\n
| \n Free Trading Resources<\/strong><\/p>\n Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Traders were jumping over themselves to buy call options last week. That sent the CPC below the 0.80 level that indicates high bullish sentiment. <\/p>\n This condition often leads to at least a short-term decline in the broad stock market.<\/p>\n |
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