Hi Big B,
Total pay out of all April options:
@ $75---$27,453,000
@ $70---$22,099,500
@ $65---$17,143,500
@ $60---$13,201,000
@ $55---$10,857,000
@ $50---$8,980,000
@ $45---$7,755,500
@ $40---$7,241,500
@ $35---$10,006,000
There is a lot I don't know about options, and I doubt I'll ever own half a million shares of 60 dollar stock, but you bring up some interesting possibilities. What if someone with half a million shares were to sell uncovered calls? They could pocket the premium and still dump the stock at key support levels. Also, if they have had the stock for any length of time they would be taking profits all the way down. All they would have to do is put in a market order to dump say 50K shares anytime it starts to rally and the bottom would fall out. If it's an institution that covers the company, they can also cut their ratings at key recovery points.
The way it pulled away from a run at resistance today was encouraging. Unfortunately, I had an order in for some more puts that didn't get a chance to fill. I've also noticed that it can be hard to get an option order filled prior to a break out. It looks like a distribution pattern to me. If it is, we should see some confirmation next week.
Regards,
Don |
