Wednesday, December 9, 2009

UPDATE: HHGREGG INC (HGG) - Does History Repeat?

There were reports that the trades yesterday (see blog below) where delta neutral (traded with stock). The delta LIVEVOLTM Pro has on that line is 30 (see options tab snapshot in previous blog). So the trade was: Buy 1 put: Buy 30 shares of stock (using 30 delta). This is equivalent to buying 7 puts for every 3 calls (a very bearish lopsided straddle).

The stock tie is not that surprising, as getting that many options up in this issue would almost certainly move the market against the buyer without tieing to stock. It is a vol bet - and a bearish one at that in my opinion.

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