Volatility at the open and close

I am not sure if you guys have read any of the sentiment magazines that I placed out on the drop box. But in one of the issues they talk about volatility on the open and close in options. The take away that I got is that options are usually over valued during the open and close and market makers are trying to hedge their positions. It is difficult with all of the buying and selling that goes one during the first 30 minutes of the open and the last 30 minutes of the close.

This morning I wanted to observe this, so I looked at some of the more volatile names. For example, I was looking at the $200 strike puts with December expiration, they traded as high as $6.99 during the open and with in an hour they were trading at $4.65. Or RIMM at the $55 strike traded as high as $2.3 and is currently trading at $1.85.

This is just something I am going to be keeping my eye on for the next few weeks to see if I can capitalize on the supply/demand inbalance to make some money.