A 1,462% Bet on Tiny Bright Health Stock (BHG) Shows Option Math Is Hard

ETJ

ETJ

A 1,462% Bet on Tiny Bright Health Stock (BHG) Shows Option Math Is Hard
Carly Wanna - Bloomberg
A big bet on a seemingly random small cap or a simple misunderstanding thanks to the complex math of options?
In the world of derivatives trading, it can be hard for Wall Street to tell the difference — a lesson likely playing out in a tiny healthcare company this week.
On Tuesday a trader, or a group of traders, purchased half a million call options on Bright Health Group, Inc., lavishing $5 million on the wager.
/jlne.ws/43rbLTZ

Another write up.

https://ca.finance.yahoo.com/news/1-462-bet-tiny-health-192931012.html
 
You are kidding me right? I get you are a shill for the exchanges, but you keep on posting options play that will 100% get the scrutinity of the SEC for insider trading. Plays like this end up 95% with insider trading guilty pleas because, you know, odds and evidence. Suggesting anything else is preposterous. The regularity of you posting those specific news (admittedly, among many others) suggests your thinking to be aligned with the line of thought that there is any methodology to successfully screen such plays. I worked for over 20 years professionally in this sector and managed risk for some of the largest sell side firms, as part of their prop groups. There is no such methodology. This is insider trading and the only question is whether the purps covered their tracks or will get caught.

ETJ said:
A 1,462% Bet on Tiny Bright Health Stock (BHG) Shows Option Math Is Hard
Carly Wanna - Bloomberg
A big bet on a seemingly random small cap or a simple misunderstanding thanks to the complex math of options?
In the world of derivatives trading, it can be hard for Wall Street to tell the difference — a lesson likely playing out in a tiny healthcare company this week.
On Tuesday a trader, or a group of traders, purchased half a million call options on Bright Health Group, Inc., lavishing $5 million on the wager.
/jlne.ws/43rbLTZ

Another write up.

https://ca.finance.yahoo.com/news/1-462-bet-tiny-health-192931012.html
More...
 
M.W. said:
This is insider trading and the only question is whether the purps covered their tracks or will get caught.
More...

Did you actually read the whole article? Someone bought $5 million worth of call options that were clearly worthless. The options then expired worthless. Whoever sold them--probably market makers--made $5 million. Some jibbering idiot lost $5 million.

Even assuming that the entire $5 million was in fact "one trader," or all related entities, how is this evidence of insider trading?

It's a zero sum transaction. How was anyone harmed? And what kind of material nonpublic information could possibly have motivated the seller?
 
M.W. said:
You are kidding me right? I get you are a shill for the exchanges, but you keep on posting options play that will 100% get the scrutinity of the SEC for insider trading. Plays like this end up 95% with insider trading guilty pleas because, you know, odds and evidence. Suggesting anything else is preposterous. The regularity of you posting those specific news (admittedly, among many others) suggests your thinking to be aligned with the line of thought that there is any methodology to successfully screen such plays. I worked for over 20 years professionally in this sector and managed risk for some of the largest sell side firms, as part of their prop groups. There is no such methodology. This is insider trading and the only question is whether the purps covered their tracks or will get caught.
More...

If it was insider trading, why did they expire worthless?
 
Me too thinks it was insider trading by the company adminstration itself, but they got cold feet and stopped releasing the key news... b/c it was so obvious that they did (illegal) insider trading... IMHO...

athlonmank8 said:
If it was insider trading, why did they expire worthless?
More...
They had no other choice.... Bad planning... :-)
 
What motivated the buyer to purchase "worthless" options? Lol

BMK said:
Did you actually read the whole article? Someone bought $5 million worth of call options that were clearly worthless. The options then expired worthless. Whoever sold them--probably market makers--made $5 million. Some jibbering idiot lost $5 million.

Even assuming that the entire $5 million was in fact "one trader," or all related entities, how is this evidence of insider trading?

It's a zero sum transaction. How was anyone harmed? And what kind of material nonpublic information could possibly have motivated the seller?
More...
 
Something along those lines is exactly what I am thinking, too. They called off the heist at the last minute. Better take a 5 mil loss than multiple years prison.

earth_imperator said:
Me too thinks it was insider trading by the company adminstration itself, but they got cold feet and stopped releasing the key news... b/c it was so obvious that they did (illegal) insider trading... IMHO...


They had no other choice.... Bad planning... :)
More...
 
ETJ said:
A 1,462% Bet on Tiny Bright Health Stock (BHG) Shows Option Math Is Hard
Carly Wanna - Bloomberg
A big bet on a seemingly random small cap or a simple misunderstanding thanks to the complex math of options?
In the world of derivatives trading, it can be hard for Wall Street to tell the difference — a lesson likely playing out in a tiny healthcare company this week.
On Tuesday a trader, or a group of traders, purchased half a million call options on Bright Health Group, Inc., lavishing $5 million on the wager.
/jlne.ws/43rbLTZ

Another write up.

https://ca.finance.yahoo.com/news/1-462-bet-tiny-health-192931012.html
More...


Is following the other half of the story?

1. First those newbie traders buy BHG

2. Unfortunately the price continues to go down

3. So they resort to publicity so as to attract attention
and hopefully people would push the price up

_______________________________


Anyway, I am sure when the above-average and average BHG employees
see the BHG chart which went from $1400 to $14,
they would have left the rotten company long ago.
So what's left is probably the dead wood.
 
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