<< the buying of KKd put series and the selling of the KKD call series, ( a synthetic short )
is the only game in town, if your negative.>>
What's wrong with simply selling the call if you're negative?
I just spoke to a local at the CBOE, the buying of KKd put series and the selling of the KKD call series, ( a synthetic short )
is the only game in town, if your negative.
The only reason why the put-call vol spread has blown out to over 100%
They can, but typically dont. There business
is about consistently taking nickel & dime spreads out of options . Also he faces reg-t capital requirements, and a marked to market book. A
10mm share short could produce quite a malox moment in the event of a squeeze. Most option
locals i know could really give a s__t about the longevity of the underlying, its about
making spreads and living for another day.
Thank you. Your comments are much appreciated.
Silver has made the big investment and seemingly holds all the cards, inside information and operating control. It is thus difficult to see how Courage could plot a play other than in cooperation with Silver, but still the buying of shares doesn't make much sense if that's the case. Unless of course Courage is working with the Krispy Board, which ultimately has final control, but this reasoning seems to lead nowhere.
Nor does inside word of a possible Long Play, or for that mattter a Short Play, square with the recently stable price and lack of trading volume; what with 90-odd million shares facing the fundamentals as we know them and the apparently certain prospect of extinguishment.
Can the option market makers short kkd without a corresponding delta position. In other words, let's say some kkd option market maker thinks we are headed to the Golden Sombrero ($0.0001 or lower). Let's say also that his option book is delta neutral; can he short, say, 10 million shares (unborrowed) even though that makes his delta minus 10 million?
You can't do that because you can't borrow any stock to short.
You still haven't defended your initial assertion that the low volatility suggested some kind of buyout deal may be in the works. Do you still think so?
yes, but whats amazing, is that for option
arbitrage, market makers and funds looking to
exploit opportunities, put-call vol spreads like this rarly exist for more than a few minutes at a time. Why?? You can buy the jan
7.5 calls at 38% Implied. Short the Jan 5 puts
at 87% implied, and short your delta weighted
basket of KKD stock.