PROG - FTD's vs T+2 vs Delta Hedging
Calls ITM are more than likely already bought.
The calls when exercised are a transfer of shares and not always a new purchase of shares.
IMO the buying pressure on Monday led to MM hedging their position on PROG on Tuesday.
With added buying pressure it sent PROG up to north of $6. This level hasn't been seen since Feb 21.
Support was found and investors rallied, causing maybe some more hedging.
Bagholders from then, day traders, and profit takers got out.
This selling pressure caused, again, a MM hedging, this time they sold shares they previously bought. This is extreme resistance, MM know this.
Support was found and bulls rallied to cause (perhaps) some more MM hedging.
The large swings in price caused extra buying/selling pressure but bulls in control
Higher lows can be set above $4.00
Just because there were a high volume of ITM that expired on 11/19/21 we cannot assume that
all/most of these were either naked calls. MM go out and hedge when the price is running up by
buying shares. They can also sell those shares if the option falls OTM. If the itm calls are
exercised on then is more likely than not those shares are already owned and priced into
the stocks price. It is unwise IMO to assume the idea behind T+2 and more shares
being hedged for after expiry. That said, if the shares cannot be located then that's when it becomes an
FTD and could take 30+ days to settle.
The calls when exercised are a transfer of shares and not always a new purchase of shares.
IMO the buying pressure on Monday led to MM hedging their position on PROG on Tuesday.
With added buying pressure it sent PROG up to north of $6. This level hasn't been seen since Feb 21.
Support was found and investors rallied, causing maybe some more hedging.
Bagholders from then, day traders, and profit takers got out.
This selling pressure caused, again, a MM hedging, this time they sold shares they previously bought. This is extreme resistance, MM know this.
Support was found and bulls rallied to cause (perhaps) some more MM hedging.
The large swings in price caused extra buying/selling pressure but bulls in control
Higher lows can be set above $4.00
Just because there were a high volume of ITM that expired on 11/19/21 we cannot assume that
all/most of these were either naked calls. MM go out and hedge when the price is running up by
buying shares. They can also sell those shares if the option falls OTM. If the itm calls are
exercised on then is more likely than not those shares are already owned and priced into
the stocks price. It is unwise IMO to assume the idea behind T+2 and more shares
being hedged for after expiry. That said, if the shares cannot be located then that's when it becomes an
FTD and could take 30+ days to settle.
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