Kotak Mahindra Bank's share crash multiplied the trader's money through the put option. (File)
The "21 din me paisa double" dialogue from 'Phir Hera Pheri' has become a quintessential meme template. But a trader's move in the share market two days ago has likely topped it by a multifold.
The trader likely made major gains yesterday as he bought 18 lots of Kotak Mahindra Bank at a dirt-cheap price. The bank was on Wednesday barred by the RBI from onboarding new customers online and issuing new credit cards. The RBI action made the bank's shares crash at least 12% yesterday.
It is this crash that multiplied the trader's money through the put option, a short contract that makes profits when the stock price declines. Such contracts expire on the last Thursday of every month, and this too would have made the winning run on the very last day before expiry.
OptionsAlgos-Quanta, a trader handle, shared a trading chart on Friday and claimed that an insider bought several lots of KOTAKBANK April 1700 PE at just Rs 1,000 and ended up with gains of around Rs 20 lakh.
"Some insider bought 18 lots of kotak bank yesterday at 3:11 pm. His investment would have been hardly 1k inr. He would make 20L inr of profits today," the post read.
The short contracts appreciated between 104-71,600% before it expired yesterday, Moneycontrol reported, adding that KOTAKBANK APR 1700 PE went from 20 paise closing on Wednesday to Rs 60 on Thursday, a rise of 71,600%.
Option premiums reach zero on expiry, which is why several of these options were trading in the range of a few paise, and the sudden shares crash triggered a sharp rise in the options premium to such a high, explained Moneycontrol citing an expert.