Greenspan’s Deafening Silence Is Noise For Options Traders
Who
can predict what he will do? In
his prepared speech this morning, the once revered Chairman of the Fed gave no
hint that he will cut rates any further in the immediate future, despite the
sloppy stock market and near-zero growth rate projected for the economy. Options
players took the news (or lack thereof) in stride, and continued their trend of
selling premium on relative inactivity. Not
that it would have done any good anyway…we all saw how the options market
reacted to his recent half-point cut: traders packed up and headed for the
hills, bringing the overall level of order flow to preposterously low levels.
As I write, I am
glancing over at my favorite bookend —