steve harrix, re:<another small aftermarket NASDAQ trade just popped thru on AMD. 300 shares at 30 1/2>
Last NYSE quote was 29 1/8.
I suspect these trades are between accounts of one person or between two collaborators with the intent to skew options pricing on the next trading day.
For example, a skimmer (someone who looks for abnormally priced options) might notice that the last trade on AMD December 30 call was 1 1/2 at 16:10, but that the theoretical value if the stock is at 30 1/2 would be 2. So he'll enter a buy order at 1 5/8 for the next morning, hoping to turn around and sell it at 2. Meanwhile, the guy who did the bogus trade has a bunch of December 30 calls he wants to unload. You get the picture...
EDIT: This is a pretty flawed strategy because in the A.M., the options don't start trading immediately, so the false rise in the aftermarket trade might disappear first. On the other hand, maybe some 'net brokers have aftermarket options trading and the perpetrator is trying to move the price.
Don't worry about expiration Fridays. They close the expiring options exactly at 4PM EST. Most brokers won't even accept an order after 3:45. If you are holding calls that are "at the money," they will be exercised automatically only if they are at least 1/4 point "in the money." I believe different brokers have different rules, but I suspect they all use the NYSE close to determine whether call and put options are automatically exercised.
If you own the calls or puts you can always tell the broker you want to exercise them, even if they are out of the money, or that you don't want to exercise them, even if they are IN the money.
If today were expirations Friday, I would be very dubious about exercising December 30 calls in AMD.
Petz |
