Yes and no regarding the effect of massive option buying and then getting rid of those options in the afternoon. Certainly if someone was buying calls by the hundreds of thousands in the morning that would send the stock price higher. That was exactly the situation in 2020 when TSLA was climbing to the moon and the call buying was forcing the stock price upward at a frantic pace. OTOH, market makers normally seem to protect the stock price from getting too far ahead of the max pain number (and nearby big call walls), but they don't often extend the same courtesy when the stock price is on the way down. I believe this is both because there are typically more calls bought than puts and because the stock price generally moves higher as the year progresses (and so downward movement reduces the amount paid out to longer term call holders over time).
What manipulators are really doing by pushing the stock price down quickly at market open is changing the psychology of investors. They're generating a fear of falling which often leads to investors buying puts (which pushes the stock price further down) or selling shares at a low price. That fear can persist throughout the day, allowing easier buying to close those puts. It's particularly potent after a long dip such as we're in. In such a situation, a rally early in trading day is not as likely to generate fear of missing out (FOMO). Investors are more skeptical about rallies than dips due to the market maker influence.
Last edited:
