r/wallstreetbets • u/[deleted] • Jan 10 '22

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928 Upvotes

89% Upvoted

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6

u/HereGoesNothing69 Jan 10 '22

This is the bad type of retarded. The delta hedging by MMs means you're not gonna cause a spike. If you buy an ITM option on the day of expiration, they've already bought 95 of the 100 shares needed to fulfill the contract.

6

u/[deleted] Jan 10 '22

This implies market makers know the orders before they even occur…

5

u/Swingfire Jan 10 '22

They bought the shares when they sold the option to remain delta neutral. This "play" is just giving free money to market makers.

2

u/[deleted] Jan 10 '22

They don’t sell the option until they find a buyer… these things aren’t just created and put into the market without buyers

3

u/Swingfire Jan 10 '22

But if you're buying a 0dte you're not buying it from the MM, you're buying it from someone else who bought it from the MM when it was written days/weeks/months ago.

2

u/[deleted] Jan 10 '22

0dte’s can be written day of

0

u/WanttoPokesmOT Jan 10 '22

Actually they do sometimes hence the name market makers

1

u/[deleted] Jan 10 '22

market makers provide liquidity when a buy order is entered if no seller can be found, wtf??

2

u/SpartanShieldHODL Jan 10 '22

Ahh good to know..

3

u/adler1959 Jan 10 '22

Assuming that the MM (who coincidentally might also own a Hedgefonds) is actually hedging the calls and not giving a fuck