cheap otm

B

BoneFishGA

who buys and sells cheap otm options?
QQQQ trades at 40
Oct 50 call trades at 0.01
I guess the buyer can buy a bunch of contracts cheap and hope for a big move.
Risky but if he hits it could be big.
Is this the idea?
And
Have no idea why anyone would sell options for a penny.
What am I missing here?
 
Quote from BoneFishGA:

who buys and sells cheap otm options?
QQQQ trades at 40
Oct 50 call trades at 0.01
I guess the buyer can buy a bunch of contracts cheap and hope for a big move.
Risky but if he hits it could be big.
Is this the idea?
And
Have no idea why anyone would sell options for a penny.
What am I missing here?
More...


If I were short any October option I would gladly cover it for a penny, and anyone who is short that call is a potential buyer.

Who would sell? The longs might sell. MMs long extra 48s and 49s might sell. People who love selling high probability options might sell.

Mark
 
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Quote from dagnyt:

If I were short any October option I would gladly cover it for a penny, and anyone who is short that call is a potential buyer.

Who would sell? The longs might sell. MMs long extra 48s and 49s might sell. People who love selling high probability options might sell.

Mark
More...

I didn't think about someone being short and covering. duh.
Thanks
 
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