cheap otm

Discussion in 'Options' started by BoneFishGA, Aug 22, 2009.

  1. who buys and sells cheap otm options?
    QQQQ trades at 40
    Oct 50 call trades at 0.01
    I guess the buyer can buy a bunch of contracts cheap and hope for a big move.
    Risky but if he hits it could be big.
    Is this the idea?
    Have no idea why anyone would sell options for a penny.
    What am I missing here?
  2. dcvtss


    nobody there is only 100 open interest on that contract
  3. uh, you don't know do ya?:D

  4. If I were short any October option I would gladly cover it for a penny, and anyone who is short that call is a potential buyer.

    Who would sell? The longs might sell. MMs long extra 48s and 49s might sell. People who love selling high probability options might sell.

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  6. I didn't think about someone being short and covering. duh.