RE:RE:RE:RE:Predicting closing prices on Option Expiration DaysYes. The counterparties do not lose money, have the options they sold already covered. They don't take risks.
However, one must realize that due to the lopsided call bias just sticking out there for all to see, it presents a significant additional cash opportunity if they are able to easily smash the price down at expiry. It is sitting there like low hanging fruit, ripe for the picking.
If there is also a substantial or widespread call bias on other names as well, it may be worth it for them to bring down the whole sector by a combination of shorting, and news releases. Easily done with the one sided reporting in place nowadays. It took Bloomberg a whole 30 minutes to acknowledge the sudden drop in the indexes and that the spike in oil and gold was due to the Ukraine tensions. Instead they blamed it on saying that stocks were suddenly following the Nasdaq down.
For this reason, and the fact that the White House news release about an imminent invasion Friday was just that, only news, I thought it prudent to take advantage of the moment and sell half my March calls at close on the spike, and book the profits. Perhaps war might not break out this weekend after all, as the market seems to have priced in on Friday. Everyone is predicting war with Russia and Ukraine, except Russia and Ukraine.
As I have such a biased bull oil outlook, it really really pained me to do that, but past experience has taught me that it was technically and strategically the right thing to do. I am now letting the last half ride, and can now start the process of buying a nice pool villa from the proceeds from the first half.
May market manipulation always be on our side.
I'm off to enjoy a wonderful motorbike ride tomorrow morning through the mountain jungles on the dirt bike.
Have a good weekend!
w8asec wrote: remember, if many of these calls were sold months to a year ago and they are covered at a lower price say $18.00 and the owner averaged up as smart Pro's do ,,,and /or have puts to cover,,,, then there isn't as much pain as people perceive.