The market maker can sell the shares and pocket the
spread. Risk-free trade for him. If it is a put buyer,
then maybe they think LNG will collapse further. Either way,
the MM pockets the spread by buying/selling underlying shares.
this too took a drubbing, nice yield @ 8.56. I did brief
overview of some of their filings and headline disclosures.
now I have a headache and will await tomorrow to see what the
analysts have to say.
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They are selling the puts.
LNG
Posted by darnelds on 8th of Mar 2011 at 04:43 pm
They are selling the puts. They either pocket the premium, or buy it at 4. The big drop must have juiced up the premium on these.
That makes sense for the sellers, but aren't there buyers on the other end?
Posted by lessarda on 8th of Mar 2011 at 04:46 pm
The market maker can sell
Posted by darnelds on 8th of Mar 2011 at 04:58 pm
The market maker can sell the shares and pocket the spread. Risk-free trade for him. If it is a put buyer, then maybe they think LNG will collapse further. Either way, the MM pockets the spread by buying/selling underlying shares.
Got it -- the rise in premium could make the trade worthwhile playing both sides. Thanks.
Posted by lessarda on 8th of Mar 2011 at 05:05 pm
CQP
Posted by hazbin1 on 8th of Mar 2011 at 04:57 pm
this too took a drubbing, nice yield @ 8.56. I did brief overview of some of their filings and headline disclosures. now I have a headache and will await tomorrow to see what the analysts have to say.