Presumably, market makers are making between a 1/16 and a 1/4 of a point on the securities they trade via the bid/ask spreads. ASND has been trading roughly around 35 million shares a week. Lets assume that they clear 1/16 because of flucuations that might sometimes catch them. This would mean that the gross 35,000,000 x .0625 = $2,187,500 by TRADING the security. Now, there are currently 51,734 options contracts written on ASND between the August strikes of 35 and 60 for both puts and calls, which translates to 5,173,400 shares. If the stock price closes at a optimum closing price between 45 and 50 then the option writers would profit on 24,900 calls and 13,750 puts or 38,650 options and loose on 13,084. Now lets go beyond assuming that M. Carter is correct in assuming that market makers are the primary writers of these calls and say that all options are written by market makers. Lets further assume that market makers realize a net $2 premium on all options written. This would mean that they would make $7.73 million on options if we make all these assumptions. I am not sure how long August contracts have been trading, but lets say at least 3 months or 12 weeks. That $7.73 would average to $644,200 a week vs. $2,187,500 per week trading the stock. Hummm? This would seem to indicate that the market makers would want to TRADE stock as opposed to taking a position in it.
FORGET THE MARKET MAKER OPTION'S EXPIRATION THEORY!!!
Respectfully,
Wayde. |
