OMS...Apart from the more obvious fact that oppies tend to lead...

OMS...

Apart from the more obvious fact that oppies tend to lead the heads...the other typical pattern one can expect is that options usually track a little higher on the subsequent rallys in the heads than they did on the initial spike.

Several reasons for this...

1. Initial profit taking has been flushed through the system. (stale bulls, short-term traders, some longer term holders, etc)...in short, a good percentage of the loose stock has been snapped up!

2. The fear of missing the initial selling opportunity has usually passed and been replaced with a renewed confidence of higher prices.

3. Clearer trading parameters, such as support/resitance levels have usually been established in the heads, leading to a far more measured approach in the options.

4. A new bunch of holders have usually entered the register, generally with higher expectations.

5. People have had time to digest the initial move on the stock and determine it's implications.

6. The simple fact there has been a bounce or follow through rally, suggests the spike may not have been a one-off event?

These are just some of my thoughts on the options equation...interestingly, I notice we have hit 1.8c today, yet the heads are only 3.4c...first time around, the heads had to hit 4c before the options went to 1.8c

A sign of things to come?

Cheers!