Who buys in-the-money options on the maturity date?

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Anonymous
Who buys in-the-money options on the maturity date? 2016-07-07 04:33:44 Post No. 1366396
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Who buys in-the-money options on the maturity date? Anonymous 2016-07-07 04:33:44 Post No. 1366396 [Report]

If you buy a put or a call which is out-of-the-money and then an earnings release suddenly rockets it deep in-the-money, who the hell is buying the option when you sell it?

How is buying an ITM option on the maturity date a good idea? It'd be less expensive to just buy the underlying security at the current market rate, though you're not guaranteed to be able to buy the same amount as the option would guarantee.

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Anonymous 2016-07-07 06:27:01 Post No.1366574
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Anonymous 2016-07-07 06:27:01 Post No.1366574 [Report]

typically you will see little volume so you would exercise it or sell in advance

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Anonymous 2016-07-07 11:47:49 Post No.1366854
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Anonymous 2016-07-07 11:47:49 Post No.1366854 [Report]

Institutional traders on the wrong side of the trade covering their position. They could have been using options to protect a large stock position, the options did their job and now they're covering and repositioning using the new earnings information.

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Anonymous 2016-07-08 00:11:18 Post No.1368276
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Anonymous 2016-07-08 00:11:18 Post No.1368276 [Report]

>>1366396
You just gave me a interesting idea, OP.

Provided you have some knowledge of a sector or industry and are waiting for financial or earnings report, wouldn't be profitable to bet on about 5 different companies (either long or short) using options? Provided you're not wrong more than half the times when you're making that bet, I assume the times you stand to lose are more than covered by the right choices, no?