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Post by monger on Jul 31, 2015 10:50:37 GMT -5
Did anyone else notice that we're over 20,000 contracts on these calls today? I see three lots of 1,000 and 4,000 and 8,800 plus maybe 100 other trades. That's a lot of calls.
I'm wondering if anyone thinks this is related to the conversions, suggests a strong expectation of the price moving up shortly (hence buyers), suggests the price will not move up (hence sellers), or some other theory including today's Blue Moon.
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Post by ripano on Jul 31, 2015 11:17:09 GMT -5
Hopefully it's the shorts aka buyers finally Buying Call options to unwind and exit this trade. I guess lines 2-3 approval is what they were waiting for to stop accumulating and finally let the short squeeze begin.
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Post by ashiwi on Jul 31, 2015 12:16:24 GMT -5
Open interest is 62,205. Should be interesting to see how it adjusts on Monday.
The big volume was at .61 and .65 this morning.
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Post by monger on Aug 1, 2015 20:57:41 GMT -5
Open interest is 62,205. Should be interesting to see how it adjusts on Monday. The big volume was at .61 and .65 this morning. I've never appreciated weekends more in my life than holding MNKD when we get a time out! And yet, as you say, I can't help but wonder what Monday will bring... must be some kind of illness. :-) |
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Post by mrhaigs on Aug 1, 2015 23:06:43 GMT -5
Hate to burst the bubble but those calls look 100% sold.
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mnkdnyc
Lab Rat
Posts: 48
Sentiment: Long
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Post by mnkdnyc on Aug 2, 2015 8:24:17 GMT -5
Not true as i bought 100 of them on the heals of the 20000 buy. By the way what makes you think that they were all sold
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Post by phantomfj on Aug 2, 2015 12:13:56 GMT -5
This may sound silly, but for a call to be sold, does there not have to be a buyer on the other side of the transaction?
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Post by patryn on Aug 2, 2015 12:44:06 GMT -5
This may sound silly, but for a call to be sold, does there not have to be a buyer on the other side of the transaction? Yes. Same as when someone spreads fear by saying look 4 million shares were SOLD on Friday ( and also bought). The buyer might be an intermediary market maker, but ultimately it will get matched up with a real buyer or there would not be that much open interest. I do grow tired of seeing a net neutral event spun either positively or negatively. It's like saying tomorrow the sun will rise and having some other jerk say yes because the sun is setting today. |
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Post by monger on Aug 2, 2015 14:01:56 GMT -5
This may sound silly, but for a call to be sold, does there not have to be a buyer on the other side of the transaction? Yes. Same as when someone spreads fear by saying look 4 million shares were SOLD on Friday ( and also bought). The buyer might be an intermediary market maker, but ultimately it will get matched up with a real buyer or there would not be that much open interest. I do grow tired of seeing a net neutral event spun either positively or negatively. It's like saying tomorrow the sun will rise and having some other jerk say yes because the sun is setting today. Agreed. And yet we see these kinds of statements over and over. As I recall from the time and sales report there were three large lots that helped drive the large total for the day, but I think they were all done offline and then reported, i.e., they happened in dark pools. The reason I say that is because the prices were "abnormally normal". So let's say I want to buy 8,000 of these calls. That's going to go so deep into the ask side of the order book that I'll be taking out the $.60 asks, the $.65 asks, the $.79 asks (to make up some more random numbers) and so on maybe up to $1.00 depending on how deep the order book is. Or I'll run it out entirely. If OTOH, someone were trying to sell 8,000 of these calls, they'd be taking every bid there was. I don't recall the order book exactly, but I think a market order of that magnitude on either side would have run out the order book on the other side, resulting in "catastrophic" prices. Since that didn't happen, I'm pretty sure the three large trades happened offline somewhere, perhaps as part of a large hedge. In any event, it was pretty startling. I'm open to alternative explanations, too, since I'm just guessing here. |
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Post by joeypotsandpans on Aug 2, 2015 14:24:41 GMT -5
Yes. Same as when someone spreads fear by saying look 4 million shares were SOLD on Friday ( and also bought). The buyer might be an intermediary market maker, but ultimately it will get matched up with a real buyer or there would not be that much open interest. I do grow tired of seeing a net neutral event spun either positively or negatively. It's like saying tomorrow the sun will rise and having some other jerk say yes because the sun is setting today. Agreed. And yet we see these kinds of statements over and over. As I recall from the time and sales report there were three large lots that helped drive the large total for the day, but I think they were all done offline and then reported, i.e., they happened in dark pools. The reason I say that is because the prices were "abnormally normal". So let's say I want to buy 8,000 of these calls. That's going to go so deep into the ask side of the order book that I'll be taking out the $.60 asks, the $.65 asks, the $.79 asks (to make up some more random numbers) and so on maybe up to $1.00 depending on how deep the order book is. Or I'll run it out entirely. If OTOH, someone were trying to sell 8,000 of these calls, they'd be taking every bid there was. I don't recall the order book exactly, but I think a market order of that magnitude on either side would have run out the order book on the other side, resulting in "catastrophic" prices. Since that didn't happen, I'm pretty sure the three large trades happened offline somewhere, perhaps as part of a large hedge. In any event, it was pretty startling. I'm open to alternative explanations, too, since I'm just guessing here. Bottom line is where that number goes come (as Ashiwi mentioned originally) the open tomorrow, if it is +/- 20k will tell you if they were newly opened or closed out, if it remains the same then more than likely it was done as an exchange between desks within a firm(s) or as you term "dark pool" and showed up in the volume for the day. Only other possibility (thinking out loud) is there was a one digit error and it was meant to be 2k instead of 20k and was straightened out, or 1k instead of 10k and the reversal showed as 20k volume, would have to ask an options desk clerk or options exchange how that is typically handled. Bid Ask Last Change Vol Op Int 3.0 Call 1.45 1.60 1.56 0.00 0 12,094 3.5 Call 1.20 1.29 1.10 0.00 0 3,063 4.0 Call 0.94 1.00 0.95 0.00 0 19,788 4.5 Call 0.73 0.90 0.89 0.00 0 10,330 5.0 Call 0.63 0.66 0.64 0.00 0 62,205 5.5 Call 0.46 0.51 0.51 0.00 0 16,886 |
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Post by joeypotsandpans on Aug 3, 2015 7:37:24 GMT -5
Agreed. And yet we see these kinds of statements over and over. As I recall from the time and sales report there were three large lots that helped drive the large total for the day, but I think they were all done offline and then reported, i.e., they happened in dark pools. The reason I say that is because the prices were "abnormally normal". So let's say I want to buy 8,000 of these calls. That's going to go so deep into the ask side of the order book that I'll be taking out the $.60 asks, the $.65 asks, the $.79 asks (to make up some more random numbers) and so on maybe up to $1.00 depending on how deep the order book is. Or I'll run it out entirely. If OTOH, someone were trying to sell 8,000 of these calls, they'd be taking every bid there was. I don't recall the order book exactly, but I think a market order of that magnitude on either side would have run out the order book on the other side, resulting in "catastrophic" prices. Since that didn't happen, I'm pretty sure the three large trades happened offline somewhere, perhaps as part of a large hedge. In any event, it was pretty startling. I'm open to alternative explanations, too, since I'm just guessing here. Bottom line is where that number goes come (as Ashiwi mentioned originally) the open tomorrow, if it is +/- 20k will tell you if they were newly opened or closed out, if it remains the same then more than likely it was done as an exchange between desks within a firm(s) or as you term "dark pool" and showed up in the volume for the day. Only other possibility (thinking out loud) is there was a one digit error and it was meant to be 2k instead of 20k and was straightened out, or 1k instead of 10k and the reversal showed as 20k volume, would have to ask an options desk clerk or options exchange how that is typically handled. Bid Ask Last Change Vol Op Int 3.0 Call 1.45 1.60 1.56 0.00 0 12,094 3.5 Call 1.20 1.29 1.10 0.00 0 3,063 4.0 Call 0.94 1.00 0.95 0.00 0 19,788 4.5 Call 0.73 0.90 0.89 0.00 0 10,330 5.0 Call 0.63 0.66 0.64 0.00 0 62,205 5.0 Call 0.63 0.66 0.64 0.00 0 76,6365.5 Call 0.46 0.51 0.51 0.00 0 16,886 +14431 contracts opened...not closed out  |
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Post by traderdennis on Aug 3, 2015 10:38:22 GMT -5
This may sound silly, but for a call to be sold, does there not have to be a buyer on the other side of the transaction? Yes. Same as when someone spreads fear by saying look 4 million shares were SOLD on Friday ( and also bought). The buyer might be an intermediary market maker, but ultimately it will get matched up with a real buyer or there would not be that much open interest. I do grow tired of seeing a net neutral event spun either positively or negatively. It's like saying tomorrow the sun will rise and having some other jerk say yes because the sun is setting today. To a point, there is a buyer and a seller. Options are priced with a much higher spread (price between the bid and ask as a percentage of the trade 10-20% of the contract price) than typical stock transactions (.01 or less per share). You can infer that a large option trade at the ask is a market maker selling contracts to a purchaser and when the transaction occurs at or below the bid, it is most likely a sell on a position. In the transactions we are speaking above when a large contract at the ask, when the market makers sell 20K contracts they will immediately "hedge" their 20K position they just sold with purchasing (or selling) underlying security and creating a covered position. Their profit is locked in via the spread sold so they have very little exposure. There would be some cases where a large option transaction may happen between the typical bid/ask spread and that would be a non market maker transaction (buyer and seller) and those would occur, but most likely not as often. With LARGE option trades for the most part, market makers are usually on one side of the transa |
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Post by joeypotsandpans on Aug 3, 2015 13:10:57 GMT -5
Bottom line is where that number goes come (as Ashiwi mentioned originally) the open tomorrow, if it is +/- 20k will tell you if they were newly opened or closed out, if it remains the same then more than likely it was done as an exchange between desks within a firm(s) or as you term "dark pool" and showed up in the volume for the day. Only other possibility (thinking out loud) is there was a one digit error and it was meant to be 2k instead of 20k and was straightened out, or 1k instead of 10k and the reversal showed as 20k volume, would have to ask an options desk clerk or options exchange how that is typically handled. Bid Ask Last Change Vol Op Int 3.0 Call 1.45 1.60 1.56 0.00 0 12,094 3.5 Call 1.20 1.29 1.10 0.00 0 3,063 4.0 Call 0.94 1.00 0.95 0.00 0 19,788 4.5 Call 0.73 0.90 0.89 0.00 0 10,330 5.0 Call 0.63 0.66 0.64 0.00 0 62,205 5.0 Call 0.63 0.66 0.64 0.00 0 76,6365.5 Call 0.46 0.51 0.51 0.00 0 16,886 +14431 contracts opened...not closed out For those of you keeping track: so far today, the street games continue: 5.0 Call 0.58 0.60 0.59 -0.04 13,121 76,636 |
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Post by monger on Aug 4, 2015 10:01:49 GMT -5
With LARGE option trades for the most part, market makers are usually on one side of the transa Good point. I hadn't considered that. I probably should have captured the time and sales data at the time, but as I recall there were three large lots and two of them appeared to trade from Philadelphia, at least on one side, while the other one didn't. So I assumed they weren't all the same trade spread over three transactions. But maybe the MM was part of some of the trades or all three. |
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Post by monger on Aug 4, 2015 10:03:48 GMT -5
Vol Op Int 3.0 Call 1.45 1.60 1.56 0.00 0 12,094 3.5 Call 1.20 1.29 1.10 0.00 0 3,063 4.0 Call 0.94 1.00 0.95 0.00 0 19,788 4.5 Call 0.73 0.90 0.89 0.00 0 10,330 5.0 Call 0.63 0.66 0.64 0.00 0 62,205 5.0 Call 0.63 0.66 0.64 0.00 0 76,6365.5 Call 0.46 0.51 0.51 0.00 0 16,886 +14431 contracts opened...not closed out Thanks Joey. It never occurred to me to check that. D'oh! |
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