Gladly, he purchased the 534 put on Wednesday midday, prior to tariff announcement, when the market was still bullish for some insane reason. When a bullish SPY is at 565 and you're buying a put for 534 that expires in two days, its gonna be very cheap (contract price at $0.20 per share).
Then the market took an absolute nosedive to the point this "highly unlikely" move ended up not just in the money, but fucking DEEP in the money. So the put was sold this morning when spy was around 520. If he had sold it at closing, his contract would've been worth approx $3,000.
If he had put in $200 instead of $20 initially, final payout could've been $30,000.
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u/aeclipseguy 1d ago
Can some one explain this trade to me and how did it work?