0.5 left when put expired OTM?

[Nine_Ender]

Quote from trader198:

there is no money left in 585 put.
it does not matter where the closing at.

if aapl closed at 585.9, and 585put last at $1, it is still worthless. it is pretty normal. since there is no trading before the closing.

the last print does not represent the put value after closing. you can see lots of this kind of closing, that is just the last trade. someone just does not trade, they just hold for last minute gamble till closed.

No, there was a standing bid of 1 contract at 0.50. Probably the remaining contract in a larger order. Someone got filled at 3:59 and didn't have the time or desire to remove the remaining 1 ordered. The other possibility is a bad print, and the order was cancelled during the last minute.

AAPL closing above 585 makes the put worthless to most people, but anyone with a large account could wait until shortly before the exercise deadline to see if AAPL dropped. AAPL did in fact drop below 585 after hours, but not enough to justify an exercise.

 

[rmorse]

We are talking about a $585 stock, that can move $5.00 in seconds. If you were short 1000 of the 585 puts with 5 min. to go in the day, would you bid to cover? Would you take the risk that some puts would be assigned and have that risk Monday morning? If you were the local MM, how much money is that transfer of risk worth near the close? I would not sell those puts at $0.50 to open.

Bob

 

[Nine_Ender]

Quote from rmorse:

We are talking about a $585 stock, that can move $5.00 in seconds. If you were short 1000 of the 585 puts with 5 min. to go in the day, would you bid to cover? Would you take the risk that some puts would be assigned and have that risk Monday morning? If you were the local MM, how much money is that transfer of risk worth near the close? I would not sell those puts at $0.50 to open.

Bob

Agreed. The buyer is often crystallizing their gains and/or eliminating their risk entirely. If you were up $5 a contract and could guarantee a $4.50 profit its a nice move.

With order imbalances the closing print can be quite important.

 

[newwurldmn]

Quote from rmorse:

We are talking about a $585 stock, that can move $5.00 in seconds. If you were short 1000 of the 585 puts with 5 min. to go in the day, would you bid to cover? Would you take the risk that some puts would be assigned and have that risk Monday morning? If you were the local MM, how much money is that transfer of risk worth near the close? I would not sell those puts at $0.50 to open.

Bob

Well said.