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417 points mkmk | 1 comments | | HN request time: 0.207s | source
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xyzelement ◴[] No.37600439[source]
I don't know if this is genuinely suspicious or not. Is buying 20K of options an unusual thing? Or is this something that happens regularly with options expiring worthless or with a small gain - and it just happened to hit big this time?

IE "someone bought a lottery ticket and won" - interesting to know if they play the lottery every other day (and don't usually win?)

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trowawee ◴[] No.37600544[source]
"short-dated out-of-the-money call options that cash out a day after a merger/acquisition" is, like, the definition of a suspicious transaction. Somebody's gonna get a knock on the door from the SEC.
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jeffbee ◴[] No.37600698[source]
But lottery-ticket options trading is done all the time. The fact that the options expire the next day is part of the strategy (because before that, the options cost more). $20k might sound like a big stake but you don't know the size of the trader's portfolio, it might be 0.01% of it, and they didn't stand to lose the whole thing necessarily.
replies(2): >>37600782 #>>37601051 #
1. trowawee ◴[] No.37600782[source]
All true in the abstract. But doing it the day before an acquisition is always gonna earn you a door knock, even if you're a serial gambler.