I'll try to explain this $DKNG 2-leg play for those who are confused
Sell 10/15 40p
Buy 10/15 60c
(if you are unfamiliar with writing/selling puts investopedia.com/trading/introd…)
Let's assume for simplicity's sake that we are dealing with 1 contract each, and not 35,000
Sell 10/15 40p
Buy 10/15 60c
(if you are unfamiliar with writing/selling puts investopedia.com/trading/introd…)
Let's assume for simplicity's sake that we are dealing with 1 contract each, and not 35,000
Selling the 10/15 40p nets this trader a premium of $288. With this $288 they buy the 10/15 60c for $100. This trader is pocketing $188 (288-100) & freerolling a 60c. The trade theoretically as unlimited upside & downside starts with $DKNG @ $38.12 (40p, minus the net 188 credit)
You can reference optionsprofitcalculator.com/calculation/dk… to follow along (click the calculate button). The numbers in the attached table represent approximate profit/loss in dollars relative to the date. Again, we've been using 1 contract for simplicity's sake.
Yes, this is extremely bullish. 35,000 contracts both ways is no joke. But this doesn't mean "I should buy 10/15 60c because this trader is that bullish". Remember this trader basically got those for free.
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