Normal
The idea of risking assignment and taking out puts seems to me a messy possible waste of capital unless one actually wanted the stock.I had an incident in the last options expiry.I had a June put debit spread on BHP.I legged out on the morning of expiration day hoping the stock would rise during the day.It did and stabilized about 2pm.I waited as BHP often rises towards the close.Alas at 3.20 black full bars started to appear on the one minute tick chart.At 3.35 a call from my broker."BHP is tanking I think you should close out your short position "OK I replied reluctantly,buy at market".On the second the trade confirmation email arrived BHP started to rise fast.By 3.55 it was back at its previous level.The MM's got an extra $2000 out of me.Yuk.Is it "sour grapes and paranoia" to think I was bluffed by someone.I wonder how many others fell for it.However,the point that is relevant to this discussion is that the final settlement price was significantly higher than the last one minute tick on the live chart,which makes avoiding assignment of at the money options a risky game.For anyone that is interested,"Trading Options at Expiry" by Jeff Augen has some interesting research he has done on the US market.If anyone interested in this options play who wants a pdf copy(for loan,I have to appear to be legal,on this forum) contact me.
The idea of risking assignment and taking out puts seems to me a messy possible waste of capital unless one actually wanted the stock.
I had an incident in the last options expiry.I had a June put debit spread on BHP.I legged out on the morning of expiration day hoping the stock would rise during the day.It did and stabilized about 2pm.I waited as BHP often rises towards the close.Alas at 3.20 black full bars started to appear on the one minute tick chart.
At 3.35 a call from my broker."BHP is tanking I think you should close out your short position "OK I replied reluctantly,buy at market".On the second the trade confirmation email arrived BHP started to rise fast.By 3.55 it was back at its previous level.The MM's got an extra $2000 out of me.Yuk.Is it "sour grapes and paranoia" to think I was bluffed by someone.I wonder how many others fell for it.However,the point that is relevant to this discussion is that the final settlement price was significantly higher than the last one minute tick on the live chart,which makes avoiding assignment of at the money options a risky game.
For anyone that is interested,"Trading Options at Expiry" by Jeff Augen has some interesting research he has done on the US market.If anyone interested in this options play who wants a pdf copy(for loan,I have to appear to be legal,on this forum) contact me.
Hello and welcome to Aussie Stock Forums!
To gain full access you must register. Registration is free and takes only a few seconds to complete.
Already a member? Log in here.
