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With options, buying deep OTM puts won't result in an immediate impact on the underlying market because they have such low delta and market makers aren't going
by physguy1123 8y ago
With options, buying deep OTM puts won't result in an immediate impact on the underlying market because they have such low delta and market makers aren't going to move a lot of spot to hedge it.
- AndrewBissell 8y agoThe problem is that if you successfully rook put sellers in this way for some ungodly amount of money, they will never be able to pay out on your claim. Kinda like when all the big Wall Street Banks were caught out because AIG was threatening to go bankrupt and default on their CDS.
- physguy1123 8y agoYou might never exercise the option, but you could probably resell the option at a far higher price
- pgwhalen 8y agoIt wouldn't be immediate, but the second you put on a trade with any kind of size that far out of the money, the market makers will wise up.