2 or 3 days, anyway.... Seems like they start enough ahead of time to get it to the strike price by expiration. Won't SOMEONE please tell me if this is legal or illegal, or if not, how to determine which? I'm long the stock, and not interested in shorting it.
"It would take an investigation to prove whether or not they were playing the options as I'vve guessed, but there is no point trying to prove it or investigate it if the whole thing is completely legal." it is a gray area.
Certainly there must be some "red flags" that the SEC would use to determine whether it was legal or not. Hell, if its legal, I should be doing it on some of those worthless Nasdaq companies with high flying stocks out there. But better to know what is legal and what isn't before putting money into a play like that.
most co's don't have options . you don't have access to size capital. you don't how to properly enter and exit a position. i told you to piggyback this guy. that is completely legal.
There are "price sensitive" and not price sensitive actions. If a price sensitive action - simply disseminating news or a buiyng/ selling - is put in practice to modify or alter the normal price course, that behavior is considered illegal. In all the advanced regulated markets.
Also, don't forget that when you sell or buy 3000 options someone in the market will hedge them to the equivalent of 300000 stock. This would cause some movement as well, in either direction. You're effectively setting up 3000 conversions, this in itself would not go unnoticed. And, if some fund was really doing this, another competitor would get some word about it and step in to force their hand. In the end it is unpredictable what the outcome of the action will be, could be quite the opposite. Ursa..
i dont see the problem directly based on your example. it is common for funds and broker dealers to hedge against movement their positions when entering or exiting large positions. If they know their activity is going to move the instrument, they find a derivative to hedge against it.
I wouldn't bother with figuring out whether it's legal or not, just piggyback on their scheme and profit from it. I'd buy a tonne of straddles around the current market-price and sell a tonne of OTM credit-spreads...
Ok, thanks for the suggestions. Your answers would be valid if I wasn't long, and if it wasn't dramatically undervalued. I'm up about 60 cents/sh at the moment on it, so I'll just hold on and wait them out. When they finally get forced to cover it will go like a rocket.