Originally Posted by FrankMatthews
Originally Posted by JohnnyRedStorm
he doesn't need to be ITM if the stock popped $3 today, options still have extrinsic value that he could've cashed out on. finding the liquidity to exit is another argument however.
Yeah I get that, haven't ran the numbers but I highly doubt a $3 pop would have made much difference given the time and price. Any extrinsic value based on price would have been eaten up in time decay by the end of the day. A $10+ pop maybe cause that will add some volatility to the price. That would have been a terrible trade if that's really what he was dOing.
time decay really isn't an issue on mondays, trust me i day trade weeklies
the issue would've been the spread widening/getting filled. it's def a bad strategy, but there are degenerates out there who do this.
What kind of logic is this? laugh.gif
if it was a big institution/trader they would've just bought stock outright and hedged it with some puts.