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Who lost money during this deal? Or generally who indirectly paid these lucky gamblers?
by edweis 1y ago
Who lost money during this deal? Or generally who indirectly paid these lucky gamblers?
- naught0 1y agoThe poors. It's always the poors
- mikelitoris 1y agoEveryone else, indirectly. So other investors who weren’t in on it, pension funds, John Doe in his retirement home.
- procaryote 1y agoThe people holding the ETF and selling the option. If they had not sold the option, they would have benefited from the value rising, now they instead got (collectively) $2.5M. If the price had stayed flat or dropped, they would of course still have the $2.5M. The precision makes it look a lot like a crime, as trading on information that's not publicly available is illegal.
- michaelsshaw 1y agoThis option was OTM so they also (presumably) profited from selling. Just a capped profit
- koolba 1y agoNote that you don’t need to own the underlying equity to write an option contract. You only own the stock as a hedge. Owning the stock is a specific lower risk strategy called a covered call.
- tirant 1y agoWho lost money? It’s difficult to say, because the purchase of those calls did not really tipped the market in any direction, but just provided liquidity for the sale of those call options. Whoever shorted those calls made some money in the contracts, but they were going to lose money anyway the moment of the announcement.
- deleted 1y ago[deleted]
- roflyear 1y agoLong term this also really hurts the faith in the market, so it's going to hurt a lot of people who have exposure to anything on US exchanges.
- quickthrowman 1y agoThe market makers who were short the call options or other market participants who sold calls. Mostly the latter, MMs are pretty good about hedging their positions but I’m sure some were caught offsides.