Weird question- SPY leaps

Discussion in 'Options' started by l2tradr, Jan 8, 2009.

  1. l2tradr

    l2tradr

  2. institutional hedge??
     
  3. ptrjon

    ptrjon

    I bought all of them except for 27.
     
  4. ptrjon

    ptrjon

    I don't know who bought the other 27 though, sorry.
     
  5. l2tradr

    l2tradr

    Yeah, maybe...BUT at 25? That is almost unthinkable...
     
  6. You missed a much bigger bulge - Dec 2010 55 puts have OI of 146,994.
     
  7. Could be a fund selling 17,000 deep OTM puts at a low strike for some premium. Probably looking to cash out at the end of 2009 with a hope that market moves higher plus 1 year of decay and take profits. They could probably hedge with es futures or other things along the way to reduce risk as best as they can. That is about $1.4 million in premium.
     

  8. WOW! Someone is going to be putting a lot of money in the put writers pocket :)
     
  9. l2tradr

    l2tradr

    That I can see as a hedge, but the 25 strike perplexed me...who would buy that?
     
  10. MTE

    MTE

    I don't see why would this be unthinkable. This is around 60,000 deltas, so it could easily be a delta hedge.
     
    #10     Jan 12, 2009