Robert Morse remarked on another thread that you should examine the open interest ATM and OTM and then see how that compares to ITM. Remember the stock has gone from 80-180 in the last week, on the other side at least three people were assigned including the one with the weekend surprise. The ones that made money sold put spreads or had sold flys way OTM and closed them at a profit. They are in a minority.
@Pekelo dunno why but your Reddit posts keep coming up as a link that leads to a 404 not found page. Its a shame because your description of them is often tantalising!
@TrustyJules, do you mean bull put spreads and OTM call flys for a bullish bet? If you were bearish on such HTB stocks, how would you trade it? Do you think it is better to do a bear spread using puts instead of calls? For example, if put-call parity is not violated, -120p|+180p and -120c|+180c should theoretically have the same payoff profile. I wonder whether HTB makes them different? Even if put prices are bid up due to HTB, -120p and +180p should have their HTB parts offset, right? If -120p|+180p and -120c|+180c, for example, still have the same payoff profile, even in the face of HTB, along with the fact that -120c is much more susceptible to assignments, do you think the put spread is a wiser choice for shorting such HTB stocks?
yes bull put spreads - the chance of assignment there is low due to absence of shares in the market. If you look at P OCT19 60/80 - you can collect just about 6$ with the stock at 175$. As the upward bias is absurd at the moment. The calls on the other hand once ITM and you are short are a risk for assignment. Dont count on put/call parity the IV of puts is 3-4 higher than the calls and you cannot arbitrage this due to lack of shares.
Thanks for your explanation. I think it worths around $90, so I am considering shorting an Oct put fly 60|90|120 with $6 debit and positive Theta, risking 6 to make 24. How do you like it?
I have no opinion - I am not touching this stock or its options. Having said that check whether you can actually do this as one transaction with your broker. Mine has limited trading in TLRY so that you have to leg into such a position.
Actually that would be buying the put fly not shorting it. That price seems high to me, but if you do buy it, enter it as a spread and direct it to the CBOE. Start with a lower price and walk it up slowly. I've been noticing the best fills at the CBOE, with price improvement.