Article on Livewire, page-29

"If its going to drop 15 cents everytime it has an options expiry day that means it will be worth $0.00 in 3 years time so I don't agree with that logic."

Sorry to be pedantic (I'm no expert, but I dabble a little in options over the last decade) but you're assuming a cumulative drop. In options it's all based around the underlying, and it wouldn't go to zero as the SP is always fluctuating UP and DOWN not just down.

For example now it's 4.50 next month we could be 5 dollars plus. The 15 cents figure I'm not sure about.
It's a moving target in both directions based on the underlying share price and the relative strike price of the particular style of option (call or put and whether you buy or sell to open) that has been traded.

If you go to the March expiry options page in your platform you can see the amount of puts and amount of calls for the month.
If we look at the money which is around $4.50 there's a lot more puts with Open Interest above the $4.5 mark, than calls.

Remember for every position there's a counter party to the trade (mainly market makers in 90% of the trades). You can get an idea of underlying dollar value of the total open interest (Shares) per strike price for puts and for calls.


"If anything the fact the SP dropped a fair bit in the month would have meant that a lot of the call options were out of the money whereas a lot of put options were in the money and hence the option holders would have had to buy shares to cover their sell positions which should have moved the SP higher."

Options tend to only get exercised if they're deep in the money BUT if you have the collateral/margin you can buy back your position and sell a future one thereby never having to be exercised and buy anything, assuming you sold to open a PUT option.

Thing is for BLD it'll have some influence but as mentioned it's not a tier 1 options stock like BHP for example.

If you go an calculate the total amount (tally) of underlying dollar value exposure (Strike Price x number of contacts, the dollar value for the front month will be small relative to volumes traded daily.)

The bigger moves tend to be around ex dividend dates wrt options being exercised.

Again, I'm being overly pedantic and am no expert but had some spare time this morning as I was handling some options int the SMSF that needed rolling so hence the ramblings above.

Like I said, you really can't guess the strategies in place by the big players re options so it's not as transparent or simple straight logic.

More important are the points on lack of short sellers and the fact that capex has been spent and now awaiting revenues to be realised from projects kicking off re infrastructure. The big one as always is the sentiment about housing starts but as we know it is a part of the BLD make up but the market always overshoots to the negative on these things.

Looking at the bigger time frame chart I really hope we hold, consolidate around this 4.5 mark and move back up from there.