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
Amazing how we can look at the same trade and see two different results. I thought that someone sold the 7.5 puts and bought the calls. With a $7.5 price on opex in September they will walk away with $1,862,500. A huge bull play. At least that is how I played it using the Dec puts and Sept calls.