Replies to post #120965 on Zeev's Turnips Patch-No Politics (ZEEV)

[jrintl]

I can't tell if you agree or disagree with A99's idea (up next week due to delta) tia

[Greybeard]

Since the mantra of "most options expire worthless" most writers (the pros) are er naked and don't actually hold the underlying stock. Now they have to go out in the market and buy the stock to deliver it to the call buyers, hence pushing the stock up even more.

[Zeev Hed]

Delta hedging comes into play when option writers erred and are now under water, it thus causes a movement of the stock in the direction of the error, if calls are under water, the stock goes up, if puts are under water the stocks go down (all that if delta hedging is forced on naked writers). Don't feel bad about them, they can take easily two out of ten cycles going against them, they win the other 8 cycles hand down....