Tom Sosnoff: When A Stock Runs Out Of Options

In this clip from The Drift, Adam Mesh poses a question to tastytrade founder Tom Sosnoff that even Sosnoff admitted he'd never been asked and had never researched. The question: when a stock moves so dramatically that it runs out of available options strikes, does that create even more squeeze potential? Sosnoff's honest answer was that he didn't know. But he used the opportunity to explain why the scenario can occur at all. Options exchanges build out strike prices based on a stock's expected range of movement covering statistically likely outcomes. Under normal conditions, that's more than sufficient. But occasionally, a stock experiences a move so extreme that it blows past every listed strike. Sosnoff pointed to Moderna as a probable historical example, estimating that one of its biggest moves may have been a six or seven standard deviation event. Standard options chains don't extend that far out because statistically, nobody models for it. It's a rare edge case in markets and one of the most intriguing unanswered questions in options trading. Watch the full episode of The Drift on Benzinga's YouTube channel. #TheDrift #TomSosnoff #OptionsTrading 🌐 Find more market-moving insights at https://www.benzinga.com — your one-stop destination for the latest financial news, data, and expert analysis to stay ahead of the markets. 🖥️ Want the same tools the pros use—without the $10K Bloomberg terminal? Benzinga Edge gives you real-time portfolio alerts, weekly stock picks, and pro-grade research in one command center. 👉 https://bit.ly/4unSKiB ------------------------------------------------------------------------------------ 📲 Follow us on socials @benzinga 🔔 Subscribe To The Channel: https://www.youtube.com/@Benzinga ------------------------------------------------------------------------------------ ⚠️ Disclaimer: Investing in financial markets carries risk, and there are no guaranteed returns. All information is for educational purposes only and should not be taken as financial advice. Always do your own research and speak with a qualified financial advisor before making investment decisions. Only invest what you can afford to lose. Past performance does not guarantee future outcomes.