Anyone have feedback on the viability of this study. read study here: The Mystery of the Stock Price and the Strike Price http://www.nytimes.com/2006/05/07/business/yourmoney/07stra.html?_r=0 What is the viability of this Option Pain Calculator? http://www.optionpain.com/OptionPain/Option-Pain.php
You asked one question and tied it to an assumption. Each of us can have an opinion on, "do you think Option expiry closing prices cluster around strike prices," and if you do think so, do your think it is done by option writers for their benefit, implying manipulation. I would agree that a large open interest in one strike, can have the effect of dragging a closing price near the strike. But I don't have evidence to point to manipulation by short option traders. I make the assumption that auto hedging from both the longs and short, and traders exiting their positions near expiration can cause this. Just my opinion.
I think it's simply an indirect side effect that people want to put a label on - much like bogeyman MMs hunting their stops 50 pts away from market.