Cheap way to start a squeeze?

A

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I realize that I might cause a lot of flames, but I have to say that sometimes I like to look at the Yahoo boards. Although there a lots of useless messages, I can find sometimes something interesting.
One of the messages I found is about a way to start a squeeze buying options. There is something that makes sense, but I'm very skeptical: the discussion about the delta, posted in the last post, doesn't really convince me. I wanted to ask if I'm right. this is the link:

http://messages.finance.yahoo.com/C...4&tid=61776&mid=61776&tof=-1&rt=2&frt=2&off=1


Thanks
 
1. Its not 'cheap.' This fact becomes more evident as a trade moves against you.
2. It is not clear that a call seller would be 'forced' hedge with long stock.

If I was a market maker who had sold a shitload of calls in a deal that smelled of this scheme, I'd offload much of the short call position among several market making buddies, who would then join me in a shorting campaign to shake you out.

Still, every strategy works at some time or another. Perhaps this one does too on occasion.
 
Doing a "bear raid" is easier. You buy a lot of put options on a stock. Those short-put holders will want to short-sell the stock in order to hedge. The down-tick rule might stall their ability to do that at advantageous price levels, until after the stock takes a plunge and a big buyer emerges to absorb the selling. Try it sometime!
 
Quote from nazzdack:

Doing a "bear raid" is easier. You buy a lot of put options on a stock. Those short-put holders will want to short-sell the stock in order to hedge. The down-tick rule might stall their ability to do that at advantageous price levels, until after the stock takes a plunge and a big buyer emerges to absorb the selling. Try it sometime!
More...

Have you done it? Do you find it "cheap"?
 
Quote from nazzdack:

Doing a "bear raid" is easier. You buy a lot of put options on a stock. Those short-put holders will want to short-sell the stock in order to hedge. The down-tick rule might stall their ability to do that at advantageous price levels, until after the stock takes a plunge and a big buyer emerges to absorb the selling. Try it sometime!
More...

Dude, I think mms are exempt from the tick rule
 
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