What causes a stock options to trade through bid?

I been lugging SMMT $4 Jan Calls around. The sells are piercing the bid on PHX by 10-20%. Is it getting ready for a block, late orders or gaming(Jerking around)?

Last trades .67PHX Bid .75x .80. It’s been happening since $.90x $1.05 with prints at $.75.

 

There is no liquidity and the sellers want the order filled now.

 

Plenty of liquidity, slow grinding up taking out highs. Bid $1.15x $1.25. The orders were screwy, seen this before. It’s not like they swept the Bid.

 

Any special events happening? Looks like it's becoming more volatile.

 

No idea, been trading and holding since the mid $2s. Took some off at $1.3-.45.

 

In the last 2 weeks it was almost every day squeezed to about $4, today to $5.40. Because they licensed some Chinese drug for up to $5B (to be paid by SMMT).

Lending rate went through the roof, now "normalized" to 100%. This is probably a $2 stock, but not ready to go there yet...

 

Looks like it's a company that doesn't have earnings of its own and is just surging temporarily now because it's able to push some Chinese drugs for lung cancer. The stock is 84% owned by insiders so this could very well be insider playing wanting to cash in on this surge. Once everything dies down, expect this stock to go back down to its pre-China licensing level if it doesn't have anything else in the pipeline.

https://simplywall.st/stocks/us/pha...tm_campaign=integrated-pitch&utm_source=yahoo

https://finance.yahoo.com/news/summit-therapeutics-inc-nasdaq-smmt-132718018.html

 

If you really see live trade outside the NBBO market (and not past trade outside current market), then you need to look at the trade condition. Usually, normal trade cannot print outside current NBBO market (their might be exceptions for leg trades on spreads). Also, PHX might not be at NBBO and/or could have stale quotes.

 

They were fresh quotes because I jumped to PHX and bid. I got filled at prices below the NBBO five times by playing along with that shoddy seller.




It was like the auto-ex arb days, 99% risk free free cash if you were fast enough. I hit the bid after buying 20 with one contract to test my theory. Sold at .90 after buying at .75.


I have several data feeds, sharp Opra quotes can stale on all platforms temporarily, it’s probably a mystery.

 

I don't know the reason either, but people at CBOE used to say that in these cases you can be sure that the trade was on the bid, i.e., the option was sold. The same applies for trades going through the ask.