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Intel Corporation Message Board

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  • preston8408 preston8408 Jan 23, 2013 2:57 PM Flag

    Hay Jerry Blown I must be sick I purchased some INTC today. I can start to see some upside. I was waiting for CNBC PETE the con man to say sell, but he never did

    Option trading cannot affect price of stock , it's the other way around , look at the volumes (don't take my word for it)

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    • The APR $25 Put contract is currently trading at $4.05/$4.15 Bid/Ask.

      Suppose I submitted an order to BUY TO OPEN 1,000 of these Put contracts at the ASK price.
      When that order is completed, I submit another 1,000 Put contract buy at the current ASK price.
      Suppose I repeat that process 100 times.

      You are saying that my action will have no effect on the share price?

      Who WROTE the 100,000 put contracts that I just opened?

      SInce there are only 6,000 contracts open now, the OMM is the one that WROTE them for me. The OMM was the seller.

      There is a good chance that the OMM will get the shares in April. He will hedge. How does he hedge having to write put contracts? He shorts the shares. My pushing 1,000 put contracts on him causes him to short shares to prepare for the 1,000 x 100 = 100,000 shares. When he shorts 100,000 shares, that might affect the share price.

      If I BUY TO OPEN 1,000 PUT contracts and he shorts 100,000 shares, it will affect the share price.
      If I repeat this action 100 times, be confident that the OMM shorting 10,000,000 shares will affect the share price. There is a cause/effect relationship.

      • 2 Replies to alexander.dumbass
      • "There is a good chance that the OMM will get the shares in April. He will hedge. How does he hedge having to write put contracts? He shorts the shares. My pushing 1,000 put contracts on him causes him to short shares to prepare for the 1,000 x 100 = 100,000 shares. When he shorts 100,000 shares, that might affect the share price. "
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        alex if you bought to PUTs, the OMM in order to hedge he needs to buy the shares not short, imo. Shorting the shares means that you can exercise your PUTs for a profit since the pps will go down and who ever bought the put made money.

        In order to hedge ,imo, he needs to buy the shares now, so in case pps goes up he already owns the shares at a lower price (the current price and in addition he will get the divy for holding the shares). In addition he gets to keep the premium.
        It seems one of us got it wrong :) (hmmm )

        now lets say the pps goes down and the OMM shorted the shares, at some point the owner of the PUTS (you) will exercise and the OMM has to provide the shares that he does not own, meanning he will need to buy them and in addition he will need to cover his shorted position.... this make no sense, imo.

 
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