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Editor's Note: Speaking of outdated methods that need to die... while most traders are still calculating put/call ratios from the 1980s, Gianni Di Poce has been quietly using advanced pressure point analysis to bank gains like +186% on RDDT and +103% on ARQQ. |
His "FREEZE POINTS" strategy spots breakouts BEFORE they happen - exactly the kind of real-time market intelligence that actually matters in 2025. |
Tomorrow (August 20th, 2 PM ET), he's revealing this system for the first time. If you're tired of using outdated tools while the smart money uses advanced techniques, this is your chance to see what actually works. |
RSVP HERE |
—Don Kaufman, Chief Market Strategist at TheoTrade |
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Don Kaufman here. |
Look, I'm about to piss off everyone who's ever read a trading book from the 1980s, but someone needs to say this: Put/call ratios are complete and total crap. And I don't care if you've got Larry McMillan's "Options as a Strategic Investment" sitting on your nightstand like it's the trading bible. |
I know Larry personally. |
I have known him since I was five years old. Great guy, wrote a hell of a book for its time. But here's the thing - you're 40 years past that crap now. |
The Problem Everyone Misses |
Here's what happened this morning that perfectly illustrates why put/call ratios will lead you astray every single time. Palantir was getting absolutely demolished - we're talking real selling pressure. |
The put/call ratio watchers were probably getting all excited: "Oh look, high put/call ratio, very bearish signal!" |
Except they have no fucking idea who's on the bid and who's on the offer. |
That's the fatal flaw. The put/call ratio doesn't tell you if puts are being bought or sold. It just tells you that puts traded. If a ton of puts trade, you don't know if they're opening or closing positions. |
What I Actually Watch (And Why It Matters) |
When I looked at Palantir today, I saw 46,000 puts trading at the ask or above. Not "puts traded" - puts BOUGHT. |
There's a bid and an offer. When someone's sweeping them at $4.10 instead of trying to negotiate between markets, that tells you something definitive. |
They're not trying to get a better price. They're buying puts with urgency. That's conviction. That's information you can actually use. |
This transparency didn't exist when Larry was writing his book. Back then, you got volume numbers and had to guess. Now we can see exactly who's doing what. |
The 2025 Reality Check |
You want to know what's really driving these moves? |
It's not traditional share buying and selling anymore. Look at AMD from early this morning - 300,000 options contracts traded versus only 15,000,000 shares. Put an extra two zeros on those option contracts, and you're looking at 30 million shares worth of exposure. |
But the average option that trades is maybe 50 delta. |
So that 30 million in options exposure translates to about 15 million shares that dealers have to hedge. Then I see exactly 15 million shares traded. |
When I was on that side of the business, I'd trade six times more stock than options throughout the day because I'd constantly have to re-hedge as the stock moved around. |
Everything that traded inside AMD today was essentially options-driven, forcing dealers to trade stock. |
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Why This Actually Matters |
Here's what people sitting at home don't understand: Stocks don't go up because people are buying them anymore. That's a bunch of bullshit. |
Stocks go up because people are buying calls. That call buying generates gamma. The gamma has to be offset. How? Market makers buy stock against their short calls. You buy a call, they're short the call, they buy the stock. You get caught in a feedback loop. |
No one's sitting there going "Oh man, I gotta take profits in my 401k today." The 401k managers are passive - they stuff your money in the S&P 500 mattress and never sell. The only time they sell is when you die or when markets are selling off so hard they panic. |
The Transparency Advantage |
Today's Palantir action was a perfect example - decisive put buying created a negative gamma squeeze. People buying puts, forcing shares lower, creating more put buying. |
It's a feedback loop you can see in real-time when you watch actual buyers instead of meaningless ratios. |
Stop Reading Books, Start Reading Markets |
People always ask me what's a good book on finance. I'm like, "I don't know, what's a good book on golf?" |
You can read all the stories you want about the biggest financial failures - those are actually entertaining. |
But if you want to understand what's happening in markets, you need current data that actually tells you something definitive. |
The market's evolved. The tools have evolved. The transparency is there if you know where to look. |
While you're calculating put/call ratios, the people who matter are watching the real order flow. And they're not sharing that edge with everyone reading outdated books. |
To your success, |
Don Kaufman |
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