Hi,
Let’s say that I have reason to believe that a company is going to go bankrupt. I have a timeline of two years and the current price of the stock is $100.
I believe it is going to $0 so I want to buy as many put options as I can with my capital which is $10,000. The current market for two year options is small because it’s a long time away and most of the available markets are for options with strike prices around $70 at “best”.
Ideally if I know it is going to $0 I would like to buy…