Amazing Short Straddle Opportunity right now

Discussion in 'Options' started by BBSLamer, Jul 28, 2020.

  1. vanzandt

    vanzandt

    Yes to the first bold-face above, no to the second.

    So what happened?
    I'll break it down for all you rookies. (EDIT>>> Ok, rookies sounds bad in a slightly arrogant way.... but I'll break it down either way.)

    Its a 100% legal scam. That's how I knew what to post what I did when I did.

    Lets look at the pre-market.

    By 5:30 AM EST the stock went from $2.80 at 4AM to $5 on 401K shares.
    A 90% jump. And note... if you bring up a 1 minute pre-market chart... it took less than 20,000 shares to run it north of $4.30.... which is where I suspect bells started going off on the terminals of folks that have stuff most of us don't. Alert type stuff.

    So.... Now it lights up radars on some serious players screens the world over, and mind you, there's nearly 2M shares short to boot. The f'r takes off.

    It flatlines at $5 until 7 Am and the pre-market opens for the retail players outside IB.
    Robinhood gets the news... "holy molly... we got us a live one!"...
    Within 10 minutes it jumps nearly 50%
    By 9AM its its nearly $9.

    The bell rings and it opens at $9.50.

    By 9:45 damn near the entire float is short. 18M shares.... it runs to $11.60 and change. A 22% + hit for those shorts, for many far larger because they thought they were "smart" and jumped in pre-market. "Its a $700,000 loan for christ sake!!!! I'm going short!".

    Well, they end up covering the whole way up.

    Now... @ $11.50ish retail players can't get in short.
    It drops back and establishes a level near $8 (like I said btw when I first saw the pig courtesy of the OP)... and then shares become available.
    The big players have positioned themselves with options by now. Graduate level hedging if you will. Destriero type stuff... but better. SLE type stuff lol.
    The day progresses and the stock is rangebound. Idiot retail jumps in short and then gets stuck holding overnight.

    The after hour session opens.... up it goes.
    Rinse, wash, and repeat in the after hours.
    Margin calls in the AM.
    Bigtime.

    There's nothing new under the sun guys.
    -vz
     
    Last edited: Jul 28, 2020
    #31     Jul 28, 2020
    unconventional wisdom likes this.
  2. vanzandt

    vanzandt


    Cheers.
    :rolleyes:

    upload_2020-7-28_20-53-25.jpeg
     
    #32     Jul 28, 2020
  3. ironchef

    ironchef

    @KCalhoun also mentioned trading KODK in his thread this morning.

    Looks like great minds think alike.
     
    #33     Jul 28, 2020
  4. It could break $14+ in a month, I would probably just short the put from a technical/probability perspective, however I don't like having skin in the game in biotech, not my flavour.
     
    #34     Jul 29, 2020
  5. S2007S

    S2007S


    Up 65% this morning
     
    #35     Jul 29, 2020
    jys78 likes this.
  6. Got there a bit sooner. Hit above 21 before the early halt.
     
    #36     Jul 29, 2020
  7. BBSLamer

    BBSLamer

    30, wow. Wonder how many folks inside the administration stocked up just before the announcement.
     
    #37     Jul 29, 2020
  8. All of us who chase these wild stocks have Stock Scanners, what's the huge value in yelling the most obvious? Not trying to be rude to Ken, I like him. Sold my $22.50s way too early at $12, made almost $5k on a stock should have made $25k listening to Van! Arg!


    Edited: Their heading to $28 right now, lol!
     
    #38     Jul 29, 2020
    vanzandt likes this.
  9. I have to say, BBS, this was an awesome example of how something can move unexpectedly (was at $50 last time I checked), so thanks for the initial post. Great case study for risk management.
     
    #39     Jul 29, 2020
    Atikon likes this.
  10. Wow, they yanked the rug on that one. Gap to $60 and then dump to $48.
     
    #40     Jul 29, 2020