Biogen halted, options expiring today.

Discussion in 'Options' started by FSU, Nov 6, 2020.

  1. Naked put writers justify it claiming they want to own the stock at $370 ect...
    #11     Nov 6, 2020
  2. zdreg


    Your answer is not very specific.
    #12     Nov 6, 2020
  3. I was trading a biotech back in 2012 where hedge funds were was short almost 100 percent the float. I begged my friend to sell because hedge funds don’t short that much unless its bad. Stock fell from $16 to $3, the $12.50 puts were $4 when stock was $16.
    #13     Nov 6, 2020
  4. newwurldmn


    maybe in 10 years it will be worth that much. This is a permanent impairment of capital for long holders.
    #14     Nov 6, 2020
  5. FSU


    Agree, I would think they would have allowed it to open before the close of the day. Many options traders will be hurt, especially retail.
    #15     Nov 6, 2020
  6. zdreg


    How is the exercise procedure handled?
    #16     Nov 6, 2020
  7. That's always a tell.

    Can you believe that while we've been sitting here talking about Biogen that Nikola has been steadfastly going about its business manufacturing zero vehicles?

    Speaking of NKLA, at one point this summer when the stock was trading around $68 the $50 puts were offered at $23. NKLA closed today at $19.58.

    Yes sir, @TrailerParkTed, always a tell.
    #17     Nov 6, 2020
    donnap and TrailerParkTed like this.
  8. FSU


    You would need to notify your broker by 530pm et (many brokers will have an earlier deadline in order to meet the 530pm OCC deadline) of your intent to exercise an out of the money contract or not exercise an in the money one.
    The problem is if you are exercising it will require a lot of capital. A 10 lot of options will be over $300,000 worth of stock. Will the broker allow this if you tell them you most likely will be assigned/not assigned on other options? I don't know. Risk departments will have some tough decisions.
    #18     Nov 6, 2020
    BlueWaterSailor likes this.
  9. Why would you exercise an OTM option?
    #19     Nov 6, 2020
  10. I'd never heard of that. Not disagreeing, but it would be interesting to find out if that's an actual thing.


    ...and that covers it. So, not turned off - just treated as though it was the price at the cash close.
    #20     Nov 6, 2020