That doesn’t make sense. For every option buyer there is a seller, most likely a market maker who already has the stock on hand to deliver it. There will be some stock buying but most of the stock needed to deliver into calls has already been bought.
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no i'm saying the stock drops from 450-150, that means they're selling the hedges correct?
Only for the strikes above ~150 but those are the ones that are least likely to expire in the money.
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right... it was at 450 this morning... that's a lot of strikes
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My point is that the strikes above 150 are unlikely to expire ITM so there is nothing to deliver and MMS don’t hold stocks against them. For strikes below 150 they are more likely to expire ITM, and the dealers hold stock against them. The idea that there is going to be ...
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