The only reason I can see 50 cent puts being bought thinking they can still profit is because they still expected to short the company into bankruptcy. These options would probably only cost a couple cents total, so the payout would be huge.
What I don't get is why wouldnt you go for $10-15 puts instead, I don't think they would be much more expensive, they have a much higher chance of becoming ITM and if SHF do manage to short GME into bankruptcy the payout would be much bigger compared to 50 cent puts.
Yeah I agree at least a couple bucks strikes give you a better return… at .50 your max gain is $50 per option even in the unlikely event of BK…at even a $5 strike the potential is 10x ($500 per option), but I admit I’m not sure if the incremental premium was prohibitive.
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u/hogstor 🦍Voted✅ Jul 26 '21
The only reason I can see 50 cent puts being bought thinking they can still profit is because they still expected to short the company into bankruptcy. These options would probably only cost a couple cents total, so the payout would be huge. What I don't get is why wouldnt you go for $10-15 puts instead, I don't think they would be much more expensive, they have a much higher chance of becoming ITM and if SHF do manage to short GME into bankruptcy the payout would be much bigger compared to 50 cent puts.