Perhaps this reflects my lack of options chops. But one question:
How do large option transactions feedback into the price (supply and demand) of the underlying stock? For example a large buy of a stock reduces supply and therefore drives price up. Does a large buying of calls do the same? If so through what mechanism? Or would that occur only when the option is exercised?
Ok, I think what you're asking is in regards to the float? The float does not change. The shares delivered are from the existing float. These large bets when they're placed, they're simply bets made with alot of research/insight/ and often inside information. The market makers of course hedge positions so delivery doesn't kill them, but the reason I follow these bets, not on a individual basis, but when I see trends develop is because having worked in this space a long time, the amount of work that does into the decision making before one of these huge bets is placed is astronomical. So by seeing a large bet placed, you're seeing the end result of days/weeks/months of research and strategy. I'm taking all that hard work and using it to potentially better my outcome.
I've really improved my premium sales since following you. Thanks for all your work and congrats on the success!
Good I’m happy to hear you’re doing well utilizing the data. That’s what this is all about, helping people grow as traders
The only blog I read daily. Congrats please give us another 5 yrs!
thanks jon! Im happy to hear that
Perhaps this reflects my lack of options chops. But one question:
How do large option transactions feedback into the price (supply and demand) of the underlying stock? For example a large buy of a stock reduces supply and therefore drives price up. Does a large buying of calls do the same? If so through what mechanism? Or would that occur only when the option is exercised?
Thanks.
And thanks for your great work.
Hey John,
Ok, I think what you're asking is in regards to the float? The float does not change. The shares delivered are from the existing float. These large bets when they're placed, they're simply bets made with alot of research/insight/ and often inside information. The market makers of course hedge positions so delivery doesn't kill them, but the reason I follow these bets, not on a individual basis, but when I see trends develop is because having worked in this space a long time, the amount of work that does into the decision making before one of these huge bets is placed is astronomical. So by seeing a large bet placed, you're seeing the end result of days/weeks/months of research and strategy. I'm taking all that hard work and using it to potentially better my outcome.