Trader turns $500 into $300,000 over weekend

frankmatthews

frankmatthews

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Jesus, where's the SEC? Part of me hopes this was just some trader who got lucky.


With Keurig Green Mountain trading around $51 late on Friday, one "hopeful" options trader decided it was an opportune time to buy 99 $60 call options (controlling 9,900 shares or around $594,000 worth at the strike) which unless something miraculous happened would expire entirely worthless within a week. Well... a miracle happened over the weekend, CMGR was bought at a 78% premium and that "lucky" options trader cashed in his lottery ticket with a 60,000% return.
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http://www.zerohedge.com/news/2015-12-07/how-one-lucky-options-trader-made-60000-return-over-weekend
 
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I mean, yeah maybe he knew something, but it doesn't necessarily have to be the case. It's just a $500 bet, if the stock moved it's traditional ATR he would've doubled his money regardless. I'm gonna lean on being naive and saying he just got lucky.
 
Hey, I mean he took his shot and hit a game winner.

He's probably done this before and lost, finally paid off this time.


He must be a Kobe fan. :smokin

#Mamba
 
Noskey said:
Well damb. Good for him :pimp: SEC should just let him cook.
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i think they honestly will. it's just a lottery ticket trade that is reasonable. stock pops $3 his options could double. just because the stars lined up doesn't mean he necessarily had to have intentions of making more than a quick double.
 
Congrats to man. Too bad he's going to have to pay some taxes on it :lol:
 
JohnnyRedStorm said:
I mean, yeah maybe he knew something, but it doesn't necessarily have to be the case. It's just a $500 bet, if the stock moved it's traditional ATR he would've doubled his money regardless. I'm gonna lean on being naive and saying he just got lucky.
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I tend to agree, $500 is peanuts but that doesn't mean he didn't hear some whipsers. These options expire Friday and the underlying was 20% away from being ITM. He wasnt gonna double his money, they were gonna expire worthless in a week. Either he knew something or he doesn't know anything.
 
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.
 
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Definitely Insider information. The trader only put $500 into it to make it seem like it was a lucky gamble.
 
JohnnyRedStorm said:
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.
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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.
 
FrankMatthews said:
JohnnyRedStorm said:
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.
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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.
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time decay really isn't an issue on mondays, trust me i day trade weeklies :lol: 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
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if it was a big institution/trader they would've just bought stock outright and hedged it with some puts.
 
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Do you have access to what the greeks were on friday? I'm really curious if there was an actual strategy to this trade.

Those calls could have been a short hedge themselves.
 
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Hmm you know ThinkOrSwim probably has them stored in their data but Idk how to use it outside of just basic charting :lol: I can ask someone though. Yeah a short hedge is even more likely when you think about how cheap the option/otm was.
 
JohnnyRedStorm said:
I mean, yeah maybe he knew something, but it doesn't necessarily have to be the case. It's just a $500 bet, if the stock moved it's traditional ATR he would've doubled his money regardless. I'm gonna lean on being naive and saying he just got lucky.
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If we had someone around here to give us advice maybe this could have been one of us. But no...............
eyes.gif
 
All these cats know the ins and outs, like the back of their hands. Quick, little 300,000 k shiiiiiiieeeeeeedddd. I need the plug.
 
Mark Antony said:
Yeah i'd think the opposite, i know it's a sure thing, i'm betting more than that.
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Nah, it is almost like if you get the teachers guide you won't take the exam and get a 100%. Something like an 87% makes more sense not to be so hot
 
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