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There has been some discussion lately of MST's action in the put market.
Some thoughts and issues..... Many corporations sell huge quantities
of puts against their own stock on a regular basis. It is not uncommon
for companies like MST, ITC, DELL, IBM and many others to have in excess
of 100,000 open interest outstanding in the put market. If the puts
expire worthless it is TAX FREE to the corporation (only on it's own stock).
Many companies .. and DELL is the best known here also are aggressive call
buyers on the own company. There have been a few periods in the last
few years when DELL earned more off of it's option activity than it earned
in the computer business. Call buying does not receive special tax
treatment so you'll see the call activity reflected (as with DELL) in the
corporate p/l. The activity is reported in the derivative press ..
such as derivatives week, but often not on a real-time basis.
The first day we listed MST at CBOE a 40,000 contract block traded.
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