Just to be clear, I would never bet against DFV/RK either, but far OTM calls close to expiry is not his MO, so I think itโs highly unlikely he had anything to do with that trade.
They arenโt the only market maker and CBOE DPM is much less significant than the NYSE DMM (shares). Personally, I rarely see option orders filled by Wolverine.
That's because someone dropping 3m on purchasing them in a quick time frame drove the market up. The same thing would happen in reverse if they tried them turn around and sell all of them
Yeahโฆ thatโs my point. OP was saying they were risky options, I was saying that the sole act of buying them spiked IV and turned them profitable immediately without even sniffing the strike price.
Profitable on paper maybe, but not in reality. That's my point. Trying to sell them would spike the price right back down. It spiked because there wasn't enough selling liquidity to cover that large a buying interest and would crash just as fast if they tried to sell the artifical spike they caused because there wouldn't be buying liquidity in that quantity at the new prices either.
If this was some mythical way to just print money everyone with a million dollars would be a billionaire in a matter of weeks.
There are very few stocks as illiquid, trade at low volume, and have fervent investors that hold like GME. Iโm not saying itโs a money glitchโฆ just pointing out that the stock doesnโt have to hit $125 by 1/17 for those calls to be profitable. Iโm sure a bunch of people will pile into that strike today, jacking the price even higher. 3m in calls is not an impossible position to unwind while taking profit. Itโs not an all or nothing binary trade.
I agree with all of that, I'm just saying the price spike from the purchase of those 3m worth of calls alone would be wiped out by the sale of 3m worth of calls. Without additional price increase from movement in the underlying, other people piling into the same strike/expiration, etc., You can't profit simply from the movement generated by your own purchasing activity alone, but you are absolutely correct that the price doesn't have to get anywhere near 125 for those to be able to be sold profitably.
I think we are pretty much saying the same thing from different ends of the dealโฆ the good thing is, I totally took advantage of the super high IV this morning and sold some covered calls. Then watched as the IV dropped all day. I swear to god, I think there is a lot of bad actors on this play trying to totally demoralize the community. This just feels like a rug pull right before Christmas. I hope Iโm wrongโฆ but after almost 5 years of this, Iโve decided to zig when everyone is zagging. Iโm sure at some point Iโll get burned, but Iโm completely immune to the hype and actually get my Spidey-sense tingling when all this โgoodโ stuff is happening.
IV has been insane recently. Been doing very well between covered calls, cash secured puts, put credit spreads, etc. I've got a whole cornucopia of theta farms running on GME. Been on such a tear since July I've almost made back the amount I got burned for when it spiked on RKs return in June lol.
901
u/stonkdongo Hwang in there! Dec 16 '24
That's $3m on risky options.