TLRY borrow rate at IB is.......

Discussion in 'Stocks' started by mskl, Sep 7, 2018.

  1. Here is the position of a friend (not me honestly)

    butterflytlry.png

    Well that was his position. Some of the 1000 butterflies he sold had short calls ITM and got assigned over the W/E. He is looking at a very difficult chat with his broker on Monday. The timing is I think to Sep21 but there may be multiple ones.

    Position sizing - all of us forget at times that even of a sure thing you should partake only in moderation.

    Forgot to ask: Robert - any idea on how that will play out?
     
    #31     Sep 16, 2018
  2. destriero

    destriero


    Fantasy position unsupported by OI. This is TDA paper-trader.
     
    #32     Sep 16, 2018
  3. Yeah - you would wish it was if you were him its a real position and he is in trouble as the short side is assigned.

    Edit: And Destriero removed his post calling into question the veracity of the position so mine looks silly. Man man - you are a case.
     
    Last edited: Sep 16, 2018
    #33     Sep 16, 2018
  4. destriero

    destriero

    I deleted and re-posted the edit before you replied. That's how time works. 100% that is a TDA paper-trader screenshot.
     
    #34     Sep 17, 2018
  5. Well the owner of the account closed the 1000 butterflies for a six figure loss. As ever there is never a free lunch on the market. Position sizing even when you think you found a great trade remains a key risk management method.
     
    #35     Sep 17, 2018
  6. FSU

    FSU

    If your friend sold the butterfly and was assigned on his short calls, he would be long calls and short the stock. He could then exercise his long calls and he would have a profit of whatever he sold the butterfly for. If he bought the butterfly, it would be the same situation but he would lose whatever he paid for it.

    A loss would come if the broker, upon seeing the exercise, immediately covered the short stock at the market and sold his calls at the market, instead of allowing him to exercise. He would also lose money if he was charged for the short stock for the day until he exercised the next day. I suppose potentially he could be bought in on the cash market if the firm was unable to deliver the short stock for the day.

    Or he could have lost by simply having to pay up or sell down his remaining butterflies.

    So how did he end up losing money and how did the broker handle it?
     
    #36     Sep 17, 2018
  7. The stock cannot be shorted because there are no available shares to borrow. The execution was of course Friday very late and there were a load of them. The total value of his trade was in the 27M range - sizing is everything. His big mistake is that some of his butterflies had positions with shorts DITM and the problem lies with the cost of carrying the short position. As you say you either settle on the market which on such huge positions can turnout against you or exercise but then you will lose whatever the difference you had in the strikes. Sure but the other side is now unhedged and you are held on margin in that leading to your positions being sold. His broker wound them down gradually for good prices so he got off lightly - the damage could have been 1M whereas he stood to gain 14K if his trade had been successfully held to expiration.
     
    #37     Sep 18, 2018
  8. FSU

    FSU

    He will not lose the "difference in the strikes" if his butterfly is exercised and he would have a hedged position if assigned. He could lose money in the ways mentioned in my last post.
     
    #38     Sep 18, 2018
  9. ajacobson

    ajacobson

    Henry Schwartz
    Owner, Trade Alert LLC
    53m

    Reefer madness hits the options markets with 3.3% of today's single stock option volume coming from two cannabis names! Average daily volume in $TLRY and $CRON is up from 6K to 270K in a month.
     
    #39     Sep 18, 2018
  10. destriero

    destriero

    Dear TestyJules,

    I think it’s time for a new nick.

    Your friend,
    The Internet
     
    #40     Sep 18, 2018