In other words, the seller has no protection from an adverse shift in price. What is a Naked Option?Ī naked option, also known as an “uncovered” option, is created when the seller of an option contract does not own the underlying security needed to meet the potential obligation that results from selling-also known as “writing” or “shorting”-an option. These institutions may also be playing ‘naked options’ to profit big on AMC premiums. Still, the unusual put option activity in AMC Entertainment stock shows just how aggressive institutions are fighting to keep shares from rising. The derivatives market has been a back door for institutions to flood AMC stock with put option contracts, in one form suppressing the stock from rising or simply having a greater advantage than average investors. Nasdaq reported on Tuesday very unusual AMC Entertainment (NYSE: AMC) put option activity.Īccording to the report first picked up by Fintel, a rather strange $781.04K block of Put contracts in AMC Entertainment was bought with a strike price of $11.00/share, expiring on April 21, 2023.įintel tracks all large options trades, and the premium spent on this trade was 5.07 sigmas above the mean, placing it in the 100.00 percentile of all recent large trades made in AMC options.īut retail investors have noticed AMC Entertainment stock has experienced unusual put option activity ever since the ‘meme stock’ frenzy in 2021. Market News Daily – Nasdaq Reports Unusual AMC Put Option Activity.
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