'katytrader' pid='21799' datel Wrote:
'johnwgrant' pid='21796' datel Wrote:As a matter of interest, whatever happened to all those June calls ?!?! When I look at the open interest today, they all appear to have "evaporated" !?!? Am I crazy or did I just dream we had thousands of calls traded yesterday ??? (OK - don't answer that !) Did someone buy and sell thousands of calls during the same day (ie, round trip these trades?) ???
It appears to be short covering. The large volume transactions occurred within the same few minutes with virtually identical pricing if my memory is correct. If the calls are bought and exercised on the same day, the transaction would not show up in the open interest nor would the assignment of the calls show up in the daily volume of the stock (per my query to Fidelity).
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So does this result in no purchases on the open market? If it is the market maker that is delivering the exerciced shares, do they just do this out of their inventory without having to buy? If so, does this mechanism greatly reduce the risk of a short squeeze? I would think the open market would eventually have to see shares bought as part of this transaction...but maybe not.