5 ms·

Couldn't those with shorts buy otm calls to hedge the possibility of a squeeze?

• cecilpl2 6y ago
  OTM calls are super expensive because the IV is through the roof (it has been over 700% most of the week).
  • jondwillis 6y ago
    However, if Melvin had picked up deep OTM calls before the (literal in both senses) volume started ramping up about two weeks ago, they might have done a little better. To be clear, I don’t actually think they did.
    • jaycroft 6y ago
      And even if they did, who's on the other side of those options now that they're in the money?
      • nursur2011 6y ago
        Could be anyone. What matters is whether they're covered calls or not. I don't know if that info is available. If it's a covered call the seller of the option has the shares, so they essentially sell them to whoever bought the option and decided to exercise the option. If they're not covered, then they have to go out and buy them.