Combo trade on VFC

Today someone shorted 570 Puts 33 on VFC @ 4.6 and simultaneously (well, kind of, since about 30 secs passed by) shorted 57000 shares @ 28.905:

"9536" 2022-12-08 10:35:05 28.905 57000 911451 28.89 28.9

Puts are expiring in 8 days and the trade is kind of bearish since it will make money below 33.5 or so. This is a reasonable expectation given both the relative short time to expiration and the problems VFC is facing in this period:
https://finance.yahoo.com/news/numerous-challenges-put-pressure-vf-161228453.html

I like this kind of trades and the reasoning behind them and I would like to know which one are the funds that are playing them. Sushequana comes to my mind, but there could be others. Does anyone know some of them?

Thanks in advance

 

SIG are known for using strategies that include options and dividend on the underlying.
VFC is going ex-div tomorrow.

So your guess is probably right about the suspect.

 

How do you know they shorted the stock?

 

Since they simultaneously shorted the put, it makes sense they shorted the stock too. Otherwise the trade would have been too imbalanced on the long side, moreover with no need to to perform both legs at the same time. The way I described it, instead, perfectly captures gains from stock movements from 33.5 to 0, in keeping both with the company difficult moment and with the upcoming ex-dividend day rb7 rightly pointed out.

 

Not an expert, but it seems that it’s as likely that someone wanted to short puts and called investment bank to get it done. The banker made the market, hedged and reported the stock transaction a bit delayed.
Did you record OI today so you can check tomorrow if they indeed shorted puts?

 

It is reported as a combo trade, so you have to look at both legs if you want to really guess the trader intent.

I have the today OI, 315, so it was fresh money. But what's the point? The OI will increase both if trader bought or sold the Put.

 

Are you seeing the calls as well?

 

Wow. You are right. The trade involved also also the buying of 570 call 33. So it is a perfect 3 leg arbitrage. They will make money regardless of the price in one week of VFC. Thanks for pointing it out.

 

So the dividend is not in play. How is it an arbitrage?

1. “VF's upcoming ex-dividend date is on Dec 08, 2022. VF shareholders who own VFC stock before this date will receive VF's next dividend payment of $0.51 per share on Dec 19, 2022.“

 

You are right again. Since they borrowed the stock in order to short it, they will need to hand back the dividend, making the trade outcome completely flat. Plus they will have to pay comssions for both the transactions and the stock lending. This doesn't make any sense, Then, the only way it can be profitable in a bearish scenario is that they bought the put and call, while shorting the stock. This trade would then make heavy money below 28.4. I kind of like this scenario, because I own myself several puts on the stock, but, since we are guessing the trade direction, we should not forget that also a bullish intent could be actually in play making money above 28.4, i.e., (short the put, long both the call and the stock or long the put and the stock and short the the call.