Wed, Jan 28, 2015, 10:10 AM EST - U.S. Markets close in 5 hrs 50 mins


% | $
Quotes you view appear here for quick access.

Paramount Gold and Silver Corp. (PZG) Message Board

  • fatherpatrick_99 fatherpatrick_99 Aug 11, 2012 12:06 PM Flag

    Busy Options Friday

    Anyone care to guess why ??

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Bear put-call spread was played by someone friday.

      Someone sold 3735 Sept. $2.50 contracts. The calls closed @25 cents and given the intraday trading range the call seller neted about $80k from the sale.

      They simultaneously used the $80k proceeds to buy 1686 Sept. $7.50 put contracts. (These closed at $5.10 so the money taken in from selling the calls matches the money spent on the puts)

      This is a bearish play:

      Imagine that PZG is $3 at Sept exp. The seller of the calls will lose 25 cents per share after taking the premium recieved from selling the call into account. (loss of $80k)

      The $7.50 puts that closed @ $5.10 friday will also then only be worth $4.50 for a loss of 60 cents per share, or a loss of $100k on the 1686 contracts.

      Total loss of $180k if PZG is $3 in Sept.

      On the other hand, if PZG is $1.50 @ Sept exp then the calls simply expire worthless and the puts (bought at $5.10 with the proceeds from selling the calls) are worth $6 for a profit of 90 cents per share, or a profit of $152k on the 1686 put contracts.

      This is a bear play>>> option player loses $180k if PZG is $3 at Sept exp BUT makes $152k if PZG is $1.50

      BEAR put - call spread

1.26+0.01(+0.80%)10:07 AMEST

Trending Tickers

Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.