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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: the navigator who wrote (840)	8/30/2007 1:07:48 PM
From: stan_hughes	Read Replies (1) \| Respond to of 71456

The deep ITM sale explanation by somebody wanting/needing to cash out is the most likely -- unfortunately the author of that article couldn't resist putting their own conspiracy theory spin onto things by implying that to sell calls in this manner somehow equates to a short -- which it does not. The people who took these calls off the seller's hands probably selected the low strike so as to eliminate as much time premium on the transaction as possible (effectively pricing the trade on a cash equivalent basis, where the seller gets their premium above strike now and their strike balance at expiry). Using a deep ITM strike also helps to ensure that even a decent-sized market selloff before September expiry won't create any other dynamics that might somehow upset the transaction, which has been structured to be a done deal and not a spec. In no way does any of what you see there imply that anyone thinks a sell-off is imminent -- it's just a plain sale of a large SPY position (or an equivalent stock basket thereof) with a minimum of disruption to the prices of the underying securities. But to say so would mean a lot of bloggers would have to write about something else instead