/biz/ - Business & Finance

>In general, index options are associated with professional traders and equity options are associated with non-professional traders. Even though professionals use index options for hedging or directional bets, puts garner a significant portion of total volume for hedging purposes. The chart below shows the CBOE Index Put/Call Ratio ($CPCI) with the 200-day moving average. Notice that this ratio is consistently above 1 and the 200-day SMA is at 1.41, which indicates a bias towards puts. This bias is because index options (puts) are used to hedge against a market decline.
Professionals are buying the fuck out of index calls here
Either they know something, know that the CPI is going to come in cool
or, the usual is going to happen - too many people expected a cool report, market is too positioned for a rise - buy the rumor sell the news event, where because of the poor professional positioning going into this report, we dump very, very hard
did the professionals get it right?
right now, dollar movement says no, they are wrong
we will see..