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Trading the maximum-pain effect
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OT-January 2007-5
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We unravel the "mystery" behind market-markers tactics before options expire and show how retail traders can benefit.
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Detailed Description
Have you ever noticed a stock sometimes gravitates toward the nearest strike price in the last few days before option expiration?
Some traders refer to an underlying instruments tendency to fluctuate around a strike price as if tethered by rubber band as "strike-price pegging," or the "maximum-pain effect."
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