Option Mark
This stock option tool will calculate the stock option sweet spot for a particular stock.
The stock option sweet spot is the price at which the most front month stock options expire worthless.
It will pull all the call and put options for the current month and calculate the strike price at which the most options will expire worthless.
This strike price is useful because it gives you an idea of what price the market maker would like the stock to close at on the day of options expiration, which is the third Friday of the month.
For example Google GOOG has a history of closing with in pennies of its sweet spot.
So if you see that Google is far off of this price nearing expiration and your technical indicators show that the stock is setup to move that direction, you greatly increase the probability of having a profitable stock or option trade.
Have you ever seen a stock that moved hard in one direction for no apparent reason? There is a good chance that the option sweet spot came into play.
What is the market makers job? Well his job is to make a market, but his objective is to have the most stock options expire worthless.
Many stocks have a history of closing at this sweet spot. Once you determine which stocks have this pattern you can use that to your advantage and add it as a tool in your trading arsenal.
If you have any questions feel free to drop us a line at support@stockcharthistory.com