people said I should dump the option's on the last day of trading instead of exercising them ... why would anyone buy equal or overpriced options on expiration day unless there was an incentive?
Options Theoretical Question
- Thread starter squarepush3r
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people said I should dump the option's on the last day of trading instead of exercising them ... why would anyone buy equal or overpriced options on expiration day unless there was an incentive?
That's why, if you want to be sure to sell an DITM option on the third Friday, you should offer it very slightly below intrinsic value. Any market maker will jump at a free dime, especially in quantity, and you'll have your fill and your profit.
If an option is nearer the money, it may still have time premium left if you sell it early enough in the day.
ok, i just got some insider information from China people who have spoken with the CFO, and that the audit report came out CLEAN, as expected. The team of lawyers is working to sort out details and it will be released soon. This is a huge opportunity for anyone IMO...
take your own risks and good luck.
take your own risks and good luck.
So you have this sceret insider information that you got and are publishing here and then want to trade off of illegaly..
You are not even good enough to be called a dick with such stupidity.
Any decent broker doesn't care if you have enough money to buy all the shares. Your buying power will go negative and they will immediately sell the shares at the soonest possible moment. I've been in the situation a few times.
Chart doesn't look good for LDK. My guess is that it goes back to $20.00
LDK Solar Co.Ltd. (LDK)
LDK Solar Co.Ltd. (LDK)
Just a quick update for the OP. Looks like there are others like you (or maybe just you) buying the FOTM front months. 673 contracts at the 90 strike today.
If there is a move to $75 by Monday then they will make a little bit of money. The reason is that vols will drop to about 50% from almost 3 times that right now. I wouldn't count on a jump up to the projected fundamental value. Everyone knows that companies frequently trade below what is considered their fundamental value. Does the name Warren Buffet ring a bell?
Anyway, if it takes till next friday then the underlying price will need to be above $80 to make the trade worth anything. If it takes till the following week the underlying must trade above $85.
Admittedly though, I like solar companies longer term and LDK is positioned for a jump if you ask me. I just don't see a jump to $90, even if the allegations turn out false.
If there is a move to $75 by Monday then they will make a little bit of money. The reason is that vols will drop to about 50% from almost 3 times that right now. I wouldn't count on a jump up to the projected fundamental value. Everyone knows that companies frequently trade below what is considered their fundamental value. Does the name Warren Buffet ring a bell?
Anyway, if it takes till next friday then the underlying price will need to be above $80 to make the trade worth anything. If it takes till the following week the underlying must trade above $85.
Admittedly though, I like solar companies longer term and LDK is positioned for a jump if you ask me. I just don't see a jump to $90, even if the allegations turn out false.
Mike, go ahead and call LDK headquarters in China if you speak Mandarin. Its not illegal information, and its not written down, but I heard from a trusted source that the audit is done, and shows no problems with inventory at all as Situ claimed.
LDK's legal team right now is processing the information, and making sure there is *NO* links between the external audit team and anyone at LDK to ensure accuracy.
Once again, I heard this information from just a person, I trust ... but from the beginning I knew Situ was untrustworthy and crazy for emailing all of wallstreet and all the big investment firms of problems, if he was legit he would have gone strait to the SEC instead of screwing a lot of average investors. What did happen?
October 3rd, LDK dropped from $69 to $52 on NO NEWS. A few hours after the drop, its released Situ (the former controller) made alleagtions about company inventory and accounting. Notice, how many people got rich from dumping and shorting at $76 because of his eMails. Since that time, its been a massive manipulation by Barrons, WSJ and other institutions until the external audit report comes out...
I am just posting in this thread to see what will happen if my plans go accordingly, and LDK does recover and reach new highs. This is my first time playing options also, since I want to max out my return on NOV and DEC calls. I predict $85 by NOV and $100 by DEC, but please don't take advice you don't believe from an internet message board
It wasn't my intention to reveal the position I was playing, but a few people were interested ... it does me no harm to reveal what I know and to help people out here since you guys helped me with options questions, most of the market follows Barrons and WSJ anyways ... I'd like to see other people make money here, but hey I still may be wrong and my contact may be a paid pumper, and the audit results poor and the stock dumps out.
I've already said too much
While I am talking, I will admit a mistake I made Monday also (my first time playing options). I purchased a bunch of very low volume options on Monday ... and my margin call went off and I didn't understand really what was happening, and my broker ended up liquidating 10k of my options at 20% market value (since there was no volume the bids were lowballs). So, I lost about 7.5k in a few hours off a mistake which I almost threw up on myself after realizing ... so maybe you would be stupid to take tips from me
I just wanted to make sure I dont make the same mistake if my plans work out and my options turn into $1,000,000 value from $20k investment (dont want to make mistakes there) ok, im talking too much today, thanks for the help everyone and good luck! If anyone has questions about LDK I'd be glad to answer if they are serious and you keep in mind you take your own investment risks. thanks for the replies again! i will now be trying to learn more about short naked puts , since im gunna sell some 40-45 PUTs on LDK to go along with my extremely bullish attitute.
If I'm wrong, hell I'll check if McDonalds is hiring =]
Actually there is some information you can reasonably assume if you follow the ticker closely. Doesn't really matter in this case though, because the volume I cited was incorrect. The heavy trading actually occurred on the 22. Probably the OP had something to do with that. Since the OP started this thread there has been almost 0 activity.
My personal forecast is that LDK jumps to $60 friday morning.