Anavex Life Sciences Corp (AVXL)

[seventhwave]

imho, i usually see 2 options strategies deployed by institutions, one which you did a great job laying out. I think it's a purely technical (long vol, direction agnostic) play on Citadel's part in response to a very long rising wedge (which xocode has been repeatedly pointing out.) ie. Citadel would do the same with any stock showing the same pattern. (To your explanation) not sure why they would write (slightly) more calls than they are long shares though. Lastly I'm guessing, the # of options in the straddle totally depend on the premium generated from the covered call. Lastly, to be accurate the trade does have a net upside bias as the long put protects the long position in the underlying to an almost complete extent but the trade is foremost a long vol view imho.

The other strategy i see institutions make is a simpler synthetic long or a 'lazy bull' where they are long a call and short a put for the same strike (or adjacent strikes.) This i'm guessing is either to be capital efficient and/or to save them time in accumulating shares while at the same time have a view on increasing implied vol (ie. options are currently cheap) The proportion of call to put can vary depending on the level the underlying stock price is at relative to the strike or even the relative upside / downside bias the manager might like to express.

Among the latest 13F filings, the most eye-catching (new) development is Dimension Capital's sizeable naked short expressed in options space. Hope they've done their research and don;t know any more than we collectively do here. Glad they are not a biotech specialist investor or it would have me worried.