Anybody can explain the huge buy-in of C 3.0 put today?

Discussion in 'Options' started by mizhael, Feb 6, 2009.

  1. There is a huge buy-in of C Feb. 20 PUT @3.0 today, this afternoon just before market close. A huge spike!

    Anybody could explain this?

    Thanks a lot!
  2. What kind of explanation do you think you can get? Somebody bought a ton of 3.0 puts.

    Maybe somebody is short C and sold puts against his position? Hard to say if this is a directional bet.
  3. For hedging reasons, you normally look at sell options. But this is a huge buy here...
  4. Maybe a new long waiting last minute to buy puts at the lowest price. Justified of course by the belief on a high close with the lowest price. synthetic call.

  5. Synthetic call, that begins to make sense, given the good news coming next Monday...

    So the buy-in of the put and the stock were separate.

    Why would somebody do this synthetic call stuff, instead of buying an outright call?
  6. rosy2


    maybe it was part of a pair/basket strategy that involved another bank
  7. Interesting! Could you please elaborate further?
  8. rosy2


    late reply but maybe it was buying C puts and selling BAC puts or XLF puts or something.
  9. Why would anyone do that?
  10. rosy2


    finance the cost of the C puts with something else. so the trade would be zero cost. or maybe volaility between the 2 were off.
    #10     Mar 7, 2009