AT.. are you saying " This is how INTC buys back a lot of shares.." that is is the reason they're using options? I don't think so.. they're using options to make big bucks. After all they own the bank on shares so to speak... like the treasury on making dollars, they can issue or withdraw stock. If they can also play agressively with writing puts and calls, knowing from the inside how their business is actually doing, then thats wrong.
How would you like to know what next weeks quarterly sales report is going to read? That might give you a distinct edge in trading options.. especially since you know which way the price will trend against analysts expectations.
Here's another hypothetical... Your XYZ company is at 100 dollars per share. You've convinced the analysts to lower expectations on your earnings... saying nebulous things like ".. agressive expectations in hindsight will be well off the generally good, but highly competetive environment we find ourselves in today." You've communicated to your trading department that earnings are now well above analyst expectations, 1st Call is .16 under you in house conservative projection. So the company sells a ton of puts, uses the money to buy a ton of calls... and the world is gleefully surprized that XYZ came in well ahead of earnings, strong upgrades by all the major houses, and the company makes out like a bandit on the options...
Oh yes, one other thing, you're the one who saw 8000 contracts of the 90 puts expand to 19000 open interest... and thought someone with the scoop knew earnings were going to be "worse than ..." Guess what, it was only the company selling a sure thing. |
