jia, compleltely nutzy cud have bought at first signs of recovery after vbottom; r/r stinks out there for shorts.
Those that are long puts are going to have their premium get crushed on the open, so they usually sell on the open and hit the first bids. There are tens of thousands of these puts, many of them will be deep itm which means they are hard deltas. When the mm's buy these puts back, they have to hedge their position by buying the underlying stock, they have no choice. This is usually why stocks that gap up or down on the open get faded hard the first 15 minutes because of this process. If there is no further buying or selling, the stock will usually roll over and make new highs or new lows. The best time to buy that dip or short the bounce is after the rotation. NOT BEFORE! Our friend is going to learn this lesson the heard way tomorrow. Of course he will have the added burden of at least 5 upgrades to deal with.
Mav, thank you. Makes sense. Sometimes commonsense is not always common, though, so inexperienced traders (like myself) will take a directional bet at an inopportune time. Thanks for the heads up.
You are nuts. Stock is 379 right now. I predict a 390 plus close tomorrow. Perhaps further selling at the end of the week back to 365 to 370 then a 400 plus close by feb expiration. There, I'm on the record.
so should the owner of DITM puts buy stock in AH is cases like this? I did it many times and saw the similar action that you described here in the morning.
Absolutely without question. Lock in your deltas. Problem is, most retail traders don't have the margin to pony up for GOOG stock so they have to wait till the open and sell their puts.
Maveric.... Where I can see the AH upgrades? I will be extremely suprised if the number of downgrades outnumber the unmber of upgrade. I expect a runup BH but crash when the market opens. I agree with Iceman's prediction of $350. Maybe it is my wish because I am short now but I believe in my position.
buy a couple back month calls and sell some front ATM puts at the open - better yet- sell some deep ITM and trade out of them intraday IF it V-bottoms.
They were on CNBC with Dylan Rattigan. They even had a GOOG bear on the show and even he said he was buying the stock at these levels. LOL. Probably a short term trade, but I thought it was funny.