ariesdrifter77 OP t1_j6lwajy wrote
Reply to comment by jeromememememe in The glitch in the matrix no one’s talking about : Notable decrease in open interest of OTM calls by ariesdrifter77
Why would they” buy to close” an OTM covered call if they don’t think it’ll go ITM?
Selling covered calls is bearish. Buying back a CC To close it should be bullish. In theory
polloponzi t1_j6lwp4u wrote
>Why would they” buy to close” an OTM covered call if they don’t think it’ll go ITM?
Because they are in profit and they would rather take the money than risk losing it because the market may keep going sideways or tank.
ariesdrifter77 OP t1_j6lxod6 wrote
It’s possible they sold for higher premiums a while ago and they’re buying them back lower, I get that. But why not let them expire worthless or buy them back cheaper IF* the market goes sideways or tanks?
polloponzi t1_j6lyhzr wrote
They might have long calls and they might be 'selling to close'. Open interest will go down if those with long calls sell those to close the position
AcceptableEnd8715 t1_j6myuin wrote
This. The majority of the call action was in the 410 and higher range and it seems likely we won’t get there before the major sell off
Fibocrypto t1_j6m19m5 wrote
Selling covered calls is a stradegy that creates income consistantly for those who do it . Yes they get blown up once in a while but more times then not they create income similar to a dividend each month or 2 on a specific stock
ariesdrifter77 OP t1_j6m4xfb wrote
And us at WSB buy those calls (for the casino’s income). Except this time the casino is buying to close the CCs on itself. LVS is a casino. This is making more sense now
Fibocrypto t1_j6m5k9i wrote
If you are correct then the casino knows what the fed is a out to do otherwise it make zero sense to be closing
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