Heavy Put Buying? (deep OTM)

Discussion in 'Options' started by Real Money, Oct 29, 2022.

  1. Real Money

    Real Money

    So, the put OI on ES ballooned going into the close on Friday. (vol crush)

    Buying far OTM puts with very near expiry is a bet on index vol right?

    Is this just a hedge for index buying? Is it banks laying risk off on GLOBEX?

    OI.png
    EWV2 is the Monday Expiry and E1BX2 is Nov. 1 -- a day before the FOMC and Fed Funds announcements.
     
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  2. dekiles

    dekiles

    Yes, absolutely true. I'm still thinking about whether to take it now.
     
  3. destriero

    destriero


    No, wing buys close to exp are stops. Smile is a function of vol of vol but you cannot avoid it. It’s explicitly a -edge trade. Expensive in vol-terms but cheap notionally.
     
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  4. destriero

    destriero

    IOW is buying a 40 vol-line in a 20-delta put a play on implied vol with ATM at 30?
     
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  5. piezoe

    piezoe

    Some of your posts remind me of this scene from airplane.
     
    Last edited: Oct 30, 2022
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  6. Cabin111

    Cabin111

    Please don't take this the wrong way. I was wondering if you have Asperger's syndrome? They believe all these people have it...Including Elon Musk.


    • Dan Aykroyd - Actor and Film Writer. ...
    • Albert Einstein - Scientist & Mathematician. ...
    • Daryl Hannah - Actress & Environmental Activist. ...
    • Anthony Hopkins - Actor. ...
    • Heather Kuzmich - Reality TV Contestant & Model. ...
    • Tim Burton – Movie Director. ...
    • Henry Cavendish – Scientist.
    My son in law has it...Brilliant engineer/mechanic/electrical. I see him playing Tetris in his mind during down time...
     
  7. cesfx

    cesfx

    I would be killing it at Tetris if I played it in my mind!
     
  8. piezoe

    piezoe

    If I do, I am unaware of it. Is that one of the symptoms.
     
  9. Cabin111

    Cabin111

    No he wasn't doing it...But something like that.

    We were selling our farm in CA. He came down from Montana to California with a 1 ton truck and huge trailer. He went back with as much; tractor, parts, implements, Bobcat that he could carry (middle of Covid). He summed up every item and looked far away...Just a couple of measurements. He then stepped back and put everything (50+ items) in each location. The weight was distributed correctly and it was perfectly counter balanced.

    I would try and make small talk...His mind was elsewhere. He was in a zone...

    To most people he will hardly respond to anything. BUT, you get him on a subject he enjoys; drones, engineering, mechanical, electrical, physics...He'll talk for an hour or two.

    He really is a nice guy, but when he gets in that zone...
     
    Last edited: Oct 31, 2022