My thoughts, OG. (Richard here--new username.)
I can speak only for myself as a seller of some of these calls (300 contracts of the total in the last couple of days).
First I have to disagree that "there is no time value in these options." By the definitions I'm familiar with, the value of the options is ALL time value, because they have no intrinsic value whatsoever--and won't until the price of the stock exceeds the strike price of the option.
Why would anyone sell call options on their KRY stock? Well, that's one way to make your investment yield a little bit, anyway: $1,500 is in my pocket to stay. Only two outcomes are possible: the options expire worthless (as my Oct. 2.5 calls did), in which case you can sell them again (which I did yesterday and today). Or they will be exercised, in which case I'll have to sell 30,000 shares of KRY at 2.50--which I will be delighted to do. (I'm in at just about a buck, and a 2-1/2 bagger is good enough for me.) No, this is not a no-brainer: if KRY shoots up to levels talked about on the forum here--say $5,6,7--I'll leave a lot of money on the table. But for a rather conservative strategy of making a few dollars, I'm comfortable with it.
Why would anyone buy call options on KRY stock? If they're interested in buying the stock, they must think the share price will exceed 2.5 on or before next April. Or, if they're only trading options with no intention of owning the stock, they must think the price of KRY will pop up significantly from where it is now, and that it seems to me is an intelligent supposition. If that happens the price of that 4/11 2.5 will take off like a rocket, and the calls can be sold back into the options market for a nice profit. Conceivably, possibly--I hope probably (for those making the trade)--the profits could be spectacular.
As I've said before on the forum here, both sides of this option trade are attractive for different reasons, and I imagine that's what is driving the action of the last several days.
Your thoughts, Boss--and OG?
