Posted on 01/22/2015 6:15:30 AM PST by Citizen Zed
If he is REALLY expecting a move such as is implied by his trade, it's much MUCH less dangerous to use a simple put volatility spread. Or $VIX in combo with some sort of $SPX strategy.
Must be nice to have that much capital that one can (haha) afford to piss away 6-figure chunks of it.
I'm fairly new to options (hell, the stock market in general - comes from a family fear of it, that I'm trying to overcome). So I'm familiar with a few of the trade types, but not all of them (and yours was not familiar to me). But, based on what you're describing, it sounds like this guy is either stupid, dangerous, or knows something we don't. I'm hoping, for our sakes, it's either of the two former.
One of my friends jokingly said - maybe it's ISIS. In this day and age, who knows.
Options contracts are sold in multiples of 100 shares.
you may be right, but all the publicity may set it off
I have never before seen IN ADVANCE a ‘gutsy bet’ announcement for a move made like this
Why are there not stores on every other trade made that day? Why only this one is newsworthy?
I think the news story itself is the manipulation attempt. Is the author of the story holding any shares?
If the intent was to make the announcement to try and manipulate the market; it is not working very well.
SPDR is up about .25 a share. Long way to go from $204.24 to $195. Unless some major news breaks to tank the market I think this guy is going to lose $450K.
I believe each put is for 100 shares apiece. So 50,000*100=5,000,000*.09=$450,000
The market doesn't care that some guy bought 50,000 short term, out of the money puts. Seriously.
I have never before seen IN ADVANCE a ‘gutsy bet’ announcement for a move made like this
It was noticed after, not announced before.
Why only this one is newsworthy?
It's not.
I think the news story itself is the manipulation attempt. Is the author of the story holding any shares?
Does the "reporter" own any shares? Who knows? His name is Jeff Kilburg.
http://www.kkmfinancial.com/bios
No kidding. CNBC has a show, or segment, called Options Action. They need to fill some airtime.
Whole bunch of nothing.
>> I shorted this morning on this run up
Ruh roh... looks like you lost your shorts! Up 263 right now.
Apparently Mr. Big doesn’t know his Obama from a hole in the ground! Maybe it was daddy’s money.
Here’s a teachable moment!
For those of us who aren’t familiar, would someone be kind enough to explain how you buy something today and make money tomorrow when the market goes *down*?
And please excuse my ignorance on the matter.
It's called a put.
An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time. This is the opposite of a call option, which gives the holder the right to buy shares.
http://www.investopedia.com/terms/p/putoption.asp
Could have been worse.
I’m only down opportunity cost this week. I should’ve bought some CAT on Tuesday or Wednesday, but I hesitated and now it looks like the market has discovered they were oversold. Darn.
Otherwise I’m up a percent or so today.
Those trades come across the ticker every second. It’s not like the smart guys are going to learn anything “special” from this story.
I'm not familiar with stock trading so could you please decipher this for me?
You can short issues...and make money when they go down...
Many, many way's to make or lose money. Ha!!
Ahhh. Thanks for the gist and the link.
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