About 10 minutes ago, it seemed to me that the Options Market Maker drastically widened the spread between bid and ask.

Any have any guesses as to what may be afoot ?

'johnwgrant' pid='21265' datel Wrote:

About 10 minutes ago, it seemed to me that the Options Market Maker drastically widened the spread between bid and ask.

Any have any guesses as to what may be afoot ?

I would guess in happened in response to a hacked tweet coming from AP which stated the white house had an explosion.  This was corrected 2 minutes later but the Dow lost over 100 points in a minute and then recovered.

'jft310' pid='21268' datel Wrote:To understand the May $60 call buy one needs to do the math .Thats 2800 call contracts that control 280,000 shares times $16 the executed price thats an investment of $4,480,000 of real dollars invested. There are more calls below this bought also. Someone thinks they know something and has made a HUGE bet today!!

If the person is willing to put so much on the line based on a powerful belief that the stock will rise, why buy so far into the money?  They could spend less and make more buying out of the money.  Could this purchase be more of a short hedge?

'jft310' pid='21270' datel Wrote:Movieguy- I can't see a short hedge investing a hedge with these kind of dollars. Its a safe bet actually I think. If IOC is $76 exactly on May 18th then one gets all their money back. If its the same person who did a hedge they spent $10,000,000 on that hedge. I would think a short hedge fund would sell out of the money calls, sell some deep in the money puts. But there are lots of possibilities and this is but one days trading the other side of this could be done another day.

I don't agree this is so "safe," as the stock was trading at $68 less than 2 weeks ago.  A minor disappointment or even a lack of patience could easily push it there again, let alone something actually negative.  But let's just agree to disagree.

What I find perhaps more interesting is the June options activity.  The 40, 45 and 50 calls all have huge volume relative to total previous open interest, and put them together you come up with over 5000 contracts.  That's over $16 million.  Someone certainly has a strong opinion.

'jft310' pid='21268' datel Wrote:To understand the May $60 call buy one needs to do the math .Thats 2800 call contracts that control 280,000 shares times $16 the executed price thats an investment of $4,480,000 of real dollars invested. There are more calls below this bought also. Someone thinks they know something and has made a HUGE bet today!!

no one seems to know whether these calls were bought or sold.  I show 6000-7000 in May and 6000 in Jun.  That's a lot of stock.....fwiw