Deep OTM put does not fall although stock is up 40 %

Discussion in 'Options' started by antares66, Aug 26, 2021.

  1. ajacobson

    ajacobson

    Get an option model off the net and start simulating big moves in IV on the OTM strikes. If you haven't done it you are in for a surprise.
    If you forecast price correctly and miss on a forecast of IV - get a big IV move and you will vastly outperform/underperform.
     
    #11     Aug 27, 2021
  2. nitrene

    nitrene

    Amazingly at $59 the Sept 30 puts were selling at $30 and at the close of $26.33 it is only at ~ $38. Down 55% and the option is up 27%. That is a leverage ration of 0.5 -- what a terrible trade.
     
    #12     Aug 27, 2021
  3. :D

    upload_2021-8-27_21-22-29.png
     
    #13     Aug 27, 2021
  4. I sold yesterday 5 puts, strike $10, expire 10.15.21, for $2.44 per contract.
    What suprised me was the huge drop from $59 to $26 within minutes. But i don´t see a fall below $7.56, my cost base ($ 10 strike minus $2.44 premium). But i could be wrong.
     
    #14     Aug 28, 2021
  5. qwerty11

    qwerty11

    There was no "huge drop from $59 to $26 within minutes"...
     
    #15     Aug 28, 2021
  6. The drop happened within 180 minutes. Ok. It´s relative ;-). For me it was fast.
     
    #16     Aug 28, 2021