open interest Jan 15 puts with strike of $20

[petrengr1]

What are the implications of the 12,006 put contracts with a strike price of $20 expiring tomorrow, Jan. 15, 2016?

Thanks!

[jft310]

If one is short those puts with a close above $20 you make money . If long puts depends on what price you received when you bought those long puts . With elevated volatility you could lose money if long puts . More likely you make bucks .

[Getitrt2]

Are they weekly contracts expiring tomorrow? I think the monthly expirations are Friday, Jan 22.

[marsexplorer]

Are they weekly contracts expiring tomorrow? I think the monthly expirations are Friday, Jan 22.

I believe the monthly options expire this weekend.

http://www.cboe.com/aboutcboe/xcal2016.pdf

[TomCrooz]

If one is short those puts with a close above $20 you make money . If long puts depends on what price you received when you bought those long puts . With elevated volatility you could lose money if long puts . More likely you make bucks .

I think you are not right with that JFT.  If you bought the puts(long the puts) , you paid money to control the right to sell IOC at 20.  You are in the money when IOC is under 20.  If you paid $1 per contract, you need IOC at $19 to break even.  If you sold the contracts(short) , you collected a premium and keep it all if IOC closes above 20.  You did not receive any money if you are long puts, you paid money to be long puts

[petrengr1]

If one is short those puts with a close above $20 you make money . If long puts depends on what price you received when you bought those long puts . With elevated volatility you could lose money if long puts . More likely you make bucks .

I think you are not right with that JFT.  If you bought the puts(long the puts) , you paid money to control the right to sell IOC at 20.  You are in the money when IOC is under 20.  If you paid $1 per contract, you need IOC at $19 to break even.  If you sold the contracts(short) , you collected a premium and keep it all if IOC closes above 20.  You did not receive any money if you are long puts, you paid money to be long puts

Thanks Tom. I guess what I was trying to point out is these calls represent 1.2 million shares. Looks like that would be significant to someone and/or the market on Friday.

[jft310]

Tom most likely these were sold puts , that investor collected a premium for that short sale . If the stock is above the strike $20 the seller gets to keep the money . The Wells Fargo fund manager likes to sell puts on Interoil. Most likely they thought that was a safe trade , They expected the stock at expiration to be above $20. The off setting put buyer to the seller of the puts would have been the market maker . The market maker will be the loser on the trade .

[Getitrt2]

Are they weekly contracts expiring tomorrow? I think the monthly expirations are Friday, Jan 22.

I believe the monthly options expire this weekend.

http://www.cboe.com/aboutcboe/xcal2016.pdf

Thanks, it appears it's the third Friday rather than the third Friday the market is open.

[TomCrooz]

Tom most likely these were sold puts , that investor collected a premium for that short sale . If the stock is above the strike $20 the seller gets to keep the money . The Wells Fargo fund manager likes to sell puts on Interoil. Most likely they thought that was a safe trade , They expected the stock at expiration to be above $20. The off setting put buyer to the seller of the puts would have been the market maker . The market maker will be the loser on the trade .

I understand how puts and calls work JFT.  I was just pointing out that when you are long puts, you do not RECEIVE money as you stated.  You lose everything you invest in the contract if you hold it to expiry and the stock is above the strike price.  You think the market maker does not want the stock to be BELOW 20( if indeed they were the buyers of all those open puts?