Tahoe Resources TAHO

Very large put open interest

[stopedout]

May 2 someone bought 25,048 June US$5 puts for about US$0.40 each for a total cost of about US$1 million.
May 8 someone bought 20,683 Sept US$5 puts for about US$0.70 each for a total cost of about US$1.5 million.
May 11 someone bought 10,236 Sept US$5 puts for about US$0.70 each for a total cost of about US$700,000.
These holdings would allow the person to sell a total of 2.5 million shares at US$5.00/sh until the third Friday in June and a further 3 million shares at US$5.00/sh until the third Friday in September.
Those are huge bets in the option world unless they are protecting a long position, which I doubt.
As a long, I worry that this put buyer has inside information.

[tadig]

Who in their right mind would have a naked short? There have been block buys recently for 500k shares, plus. Think about this logically; if the court hasn’t yet issued a decision by the middle of June, chances of this drifting lower is high. If they do issue a positive ruling, then the few million they spent on insurance pales in comparison to their 50+% gains. If they issue a negative ruling

[Crakerman]

someone actually bought this puts as calls.. Someone is betting hard on a spike... to me sounds bullish. 

[stopedout]

I think you mean that someone may have been selling the puts (to the market maker) rather than buying from the market maker, and you are absolutely right. That would be bullish as they would be obliged to buy the stock at US$5 per share. All I know is that this large open interest is a huge anomaly in the overall Tahoe picture.

[rockmstockm]

Absolutely I went all in on this one. To the moon!