You only have to look at the open interest to know why Wall Street wants to keep this at $500. They would lose BILLIONS OF DOLLARS "and" their shares if they let this go to $550 by Friday.
It goes both ways. If the stock moves up, the writers (sellers) of the options if they are naked buy the stock up as protection against loss, and the demand exceeds supply and the price moves up artifically also.
Where do you get billions? I don't manage to understand fully this option manipulation theory. As the open interest is not that great: between 450 and 500 January 19 opex there is maybe 90,000 (based on yahoo), most of it at 450 and 500.
So if the stock closes at 530 on jan 19, then payout would be around 90,000 * 100 * (30 + (500-450)/2) = 765,000,000$
How much money does it takes to manipulate a stock like apple with 5 to 10Billions volume per day and keep it down for long periods at a time?
Doesn't this seem a bit out of proportion?
I am not sure how this works either. I can understand paying someone to write an article, the cost of the article is negligible for the profit from these options expiring out of the money. What I fail to see is how a market mover manipulates the price themselves. Does this mean that someone with deep pockets and lots of apple shares sells their shares simply to keep the price down for the call premiums that they sold on the other shares? That seems like a losing strategy simply because if they are wrong, they lose both the calls and the shares that were sold at 500. Can someone explain it to me in simple terms?