Intel Corporation Message Board
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OPTION ABITRAGING IN FULL SWING
They are buying the JAN $12.50 (27k contracts), $15 (130k contracts), $17.50 (55k contracts) so they can exercise today and steal the dividend. The Option market maker is shorting Intel to protect himself.
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"The Option market maker is shorting Intel to protect himself. "
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shorts are forced to pay the divy as far as i know. So it make no sense.
the QQQ's are down, the market is down, it's not just Intel.- 1 Reply to mystk7
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The person who borrows shares and shorts them will be responsible for paying the dividend to the person he borrowed the shares from. Since the OMM will not be borrowing shares (nake shorting), he will not pay the dividend. I must confess that it might be some other than the OMM but someone will not pay the dividend on 10,000,000 to 40,000,000 shares of shorted Intel stock.
Check out last NOV 4th and 5th on fails to deliver. You will see a delta spike on the nake short for Intel.
failstodeliver DOT com
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not sure how shorting INTC will help to protect option MM - shorting will also expose the MM to more risk.
As you said before the options (calls and puts) already priced in the divy, that being said the buying is in anticipation of pps appriciation. -
Ok, but are the buying Puts, Calls or something else? And Yes I don't understand how they "steal" the dividend by doing so...
Sentiment: Strong Buy
- 2 Replies to yourwishismine
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They buy the deep calls for zero premium and sell a higher strike call that has a premium. The combined buy/sell is a neutral transaction on its face. The paired transaction is neutral so it it does not affect the trading price that much. How else could they take a 40,000,000 share position in one day without dramatically affecting share price.
They will exercise the deep calls today and own shares for the dividend.
They will have sold the call options and will be able to exit the share positions when they calls are assigned. -
calls since give you the option to purchase the shares and get the divy.
puts - option to sale the intel shares - no shares = no divy
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NOV 17th
$21 78k contracts
$20 35k
$19 12k
125k contracts more covers another 12,500, shares for 40,000,000 shares total.
Expect HUUUUUUUUUGE trades in Intel at the close.- 1 Reply to alexander.dumbass
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HUUUUUGE up swing, or down swing? Ya confused me...
Sentiment: Strong Buy
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&41k JAN $10 contracts.
Just these contracts amount to 250k contracts which translates to 25,000,000 shares.
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