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South Central Iowa | Wouldn’t be surprised if they are delta’d with calls. There was limited volatility for a long time (Vega? Reaper?), so they may be limiting losses.
I could see a downside push, but the option premium would remain high relative to it. Think farmer and small spec buying on the slight drop in call prices. So large funds shove down, try to use weak long stops to cover positions and exit shorts break-even or at small profits. Roll up calls while eager small spec pays a higher premium than a month ago when the underlying future is at similar prices, thus making some there and still covering upside. Then as shorts are exited, build long position. The faster and harder the correction, the more the funds would like it. Fast and hard scares people from going long. Just like when we made those fresh lows a week ago or whatever.
Depend on what option market open interest is and how all those “Greeks” were a few weeks ago compared to now. | |
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Why aren’t funds covering
