This type of investment is a way to limit risks and extend profits. Matched trades is a fairly rudimentary way to accomplish that.. other ways include staggered butterfly, the more complex analysis anticipates three or four formulaic scenarios. These are best executed using trading platforms that run the software executions strategies and the trade execution platform that is most efficiently tied to the major trade centers for clearance.
Sounds like Jim Cramer when he was doing that interview about how he manipulated markets by buying 1000 Jany puts when he needed the stock down, lmao. Someone wants it up but I would not enter as a buyer, the guy buying the calls is only trying to create resistance to sell into and it will go down after he has managed to sell out his entire holdings. This is clearly a pump and dump, I would buy puts when it gets above $2.30 a share. That is how to play it as a winner.
Is it? 80-90% of options expire worthless according to NASDAQ statistics. The reason for that is because options are necessarily a bet on an outlying move.. a move higher or lower than the current range and often above or bellow resistance or support levels... the long shot bets.
Who buy's options? It varies of course but a lot of people/funds buy put options as a form of insurance. A few investors buy puts when a stock has gotten battered as a form of what they consider as reasonable speculation - the premiums are high and they figure that if a stock gets put to them once in a while it will be at a low price that they would normally consider buying it anyway. Many buy call options based on their expectations that the market is wrong and the stock will bounce off a downturn or head higher than the resistance level, turning once cheap/neglected options into high percentage gains. These are, of course, highly leveraged bets so the gains can be much higher than owning the stock... its the quintessential sideshow game at the NASDAQ Barnum and Bailey Circus... where suckers are borne every minute.
What is another way to play options? Sell them. Who makes the most predictable and greatest profits in 'the insurance game'? The insurance peddlers. Selling covered calls when a stock shoots up to just bellow a major resistance level as CLWR had done recently could be an opportunity for repeatedly selling call options and watching them retire to resell them at further out expiration dates. If the stock does break through resistance, there is nothing to prevent the seller of the options from buying the stock.. after having collected 5%-30% premiums. Statistically much better odds than being an emotional trading idiot.