The selloff was caused by three factors in my opinion.
1. the negative news on the Credit Suisse Case---taking company much longer than expected and the market was the company to win and now that looks less certain
2. possible loss on PR Muni bond issue. Governor change of stance is bearish for cash strapped MBI
3. Option writers...pinning the stock for the next several months
One or a combination of all caused the recent share slide. This company is not out of the woods yet and they need to begin writing new business soon to appease market participants.....otherwise if the rest of the market starts to sell off this could retrace back to 9 bucks again.
short covering. They made out on the options and forcing this down from the recent highs. Might try and push it back up again. rinse and repeat!
MM just pulled the rug the past two days. took out a lot of stops. need to maintain 8 bucks and by Friday move higher. Right now they are just scooping up margin calls.
MM have a inventory each and every day and they have to make sure vega is neutral. if there are no buyers or sellers on either end of the bid or ask then they are forced to step in....on both the options side and the stock side. Google it or call your broker to have them explain it.
yes buy they are prohibited to take directional bets. The options bought and sold over the past 30 days is a clear indication of a directional bet.
you still dont get it Dell. There are traders that sold the calls and bought the puts. The MM sold these BIG traders the puts and bought the calls from the traders....then they shorted the stock down to make sure that they made money. Yes complete manipulation but it is not from the MM. There are no catalysts for this stock for the next 4 months which is why the traders are trading it for income. Between now and August we should move between 12 and 13 bucks....this is strictly basing my information on open interest for August options
This is a known fact. The move down in the price is in my opinion mostly caused by the traders who wrote all the options at 13 bucks. They are making out handsomely on manipulating the stock price and the implied volatility with the option market.
It looks to me that the big trades going on in the option market were bearish bets not bullish. could be wrong but unless we bounce here and get some buyers this is going lower. The only positive today is the anemic volume on the sell off this am.
take what he said into context. option traders very rarely just use options to trade or make directional bets. They buy or sell options before pushing the common shares in the direction that they want. is it manipulation? maybe maybe not. it does improve liquidity.
Todays action was very clear. tute or tutes took the share price below support in the am shaking shares loose because it broke 12.45 for a short time and at the same time loaded up on call options in Nov and sold the puts in Nov. They aim to run it higher. Same traders that ran it early in the year and then shorting and sold it down aim to do the same thing. Confirmation of my thoughts above will be if this stock moves higher for the remainder of June and July. next 4 to six weeks. If the opposite happens and the stocks goes down then we know that the traders did the opposite.....sold calls in Nov and bought puts....One gamed stock for sure.