5 ms·
Thanks for taking the time to write this up! As you're in the know, would love to see how you would contextualise your examples on GameStop (GME) this week whi
by yomly 6y ago
Thanks for taking the time to write this up!
As you're in the know, would love to see how you would contextualise your examples on GameStop (GME) this week which is all over r/wallstreetbets.
As a lurker it has been quite the case study to observe - the OI for calls and puts are absolutely insane. Is this normal? What would the option writer be thinking/doing? What would the option owners be thinking?
Allegedly one fund took out a single 50k deep ITM position in a put that could possibly even expire OTM. The tinfoilers believe this was an attempt to deliberately induce selling pressure via these gamma squeeze mechanics you've mentioned.
This world is deep, never would have realised so many layers were going on under just a stock price...
- lordnacho 6y agoIf the option is deep ITM it's basically the same as the underlying, it doesn't have the curvature to make everything interesting, and it is unlikely to expire OTM?
- yomly 6y agoThey were bought deep ITM, but there have been news catalysts that could bring them ATM/OTM. I think at one point the share price came quite close to the strike intraday. The share is super volatile and can swing 15% in a day - how do option writers hedge in these situations?
- yomly 6y agoThose puts are now deep OTM... Wow GME is up 70% today