Options Trader Bets $16.6 Million on 9% S&P 500 Rally
- Thread starter HeSaidSheSaid
- Start date
He may not know about a put is a call, a call is a put, and about synthetics, which is good for people like you, and probably also good for dogs with owners who trade options!
We? No, I think you mean YOU don't know...let's try this one more time...
He chose 1925 because that's where he thinks SPX should be ITM in March if it continues to gain as it has been in 2013.
Whether or not he hedged this position is irrelevant to the point of why he selected this expiry and strike.
Yah bro you have it all figured out! Go manage a hedge fund and "beat the market"!
I think these tools who sit around analyzing charts all day, drawing lines all over them believe they have some "insight" when in reality you can choose stocks, calls, puts or any other postion just by throwing darts at a cork board and get about the same level of performance.
If 1925 is ITM or DITM in March, he'll double to triple his money. It's really that simple...but you can sit around here and talk about it...clearly it's none of you who have million dollar anything.
Quote from Safilo:
If 1925 is ITM or DITM in March, he'll double to triple his money. It's really that simple...but you can sit around here and talk about it...clearly it's none of you who have million dollar anything.
I had no bad intention in that post, and it was not towards you. I am friends with you. I wish you really well bro. I am someone who try to always tell good things to people, being good is always better than even being neutral not to mention bad.
Knowing the options theory is really not that difficult, and I assume you know it, and in case you do not yet, I think it would be easy for a smart person like you to learn it.
What makes you sure that his real position is NOT a put? A smart put buyer might do that because higher strike has less volty, and volty is also historically cheap.
Dude, it's a delta-neutral trade, it was put up tied by a dealer . He is betting that either implied volatility is going to increase (re-striking of the vol surface as we rally further, additional risk coming to the market etc) or that S&P realises over 10 vol from today to march expiration. If that does not happen, he will lose money even if SPX is at 2000 by march expiration.
Going into the whole debt cap I was long Nov 1750 calls - I had almost zero expectation that we get there, but i certainly was sure we gonna realize more then 9.5 which is where I bot it.
Why do people sell volty below 10 (even OTM call strikes)? If one looks at history, as soon as it hits 10 at the money, the market retreats and volty rises.
Yeah, sure.
But freaking mainstream media will never tell you that this "investor" probably bought $16.6 million worth of PUT options at the same time and at the same strike price, so he/she is fully covered.
And then, days later, they will ONLY show you the "winning" side of this mega trade, not the losing side.
And then, weeks later, they would say something like: "See, we made millions, so subscribe to our service and let us manage your money for the low monthly price of bla bla bla..."
Pffff... one of the oldest tricks in the book.