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frrol

02/19/16 11:43 PM

#54399 RE: apostrophe #54383

I have to disagree for a couple reasons. First, the calls and puts are both due, so there are opposing incentives at work against each other (to push the share price up and down). Second, the writers of those calls and puts have incentives opposing the buyers' incentives. Some people don't get this finance stuff or don't know about it.

But if there is a particularly big call (or put) position out there naked at a certain expiry date, meaning there's a net impulse to cover, you might see a bigger than "normal" move as the date approached. But it would be unpredictable in magnitude or direction. Like a subatomic particle, no matter how hard you try to explain quantum mechanics math. It's just how nature (sorry, a market) works. Perfect information is illusory, an ideal.

Finally, any arbitrage-able profit by bidding the price up - or selling down - would get arbitraged out. And what is left is all the other market buying and selling. So what you're seeing is probably not a pattern or trend, as much as it might seem so.