- Can you buy PUT or CALL on the day of expiration?
- What will be this trader's speculation? The US Jobs reports was announced in the morning and the market went up and the AAPL floated at $270 between 12:30 PM and 3:45 PM.
Most likely, either the buyer is speculating that the stock will move significantly during the day (assuming buying an out-of-the-money option) or they're closing out a short position.
I'm sure there's better names, but I've seen this strategy called a "lottery ticket". You buy an extremely cheap option (because it's out of the money with a short time to expiry) and if the stock moves in your favor, great, you might make a profit. If it doesn't, oh well, you're only out the premium. It's the kind of thing that only works (without inside information) if you do it on lots of stocks and have reason to think that the stock may move significantly (like the day of an earnings release).
You don't sit at a slot machine expecting to win every pull - you play because you think that the jackpot(s) will more than make up for what you've put in. If you can somehow tilt the overall odds in your favor (e.g. by buying on earnings dates), then you might come out ahead.
- The chart does not show the price went up from $270 though floated around that amount. Does that mean the trader lost the premium for those options?
Remember that you always pay the premium upfront, and you don't "get it back" if the option expires in-the-money. You might make enough profit from the payout of the option to make up for the premium, but that's just the nature of the option payout - it's not thought of as a "refund" of the premium or anything like that. You pay X when you buy the option, and you get Y (which is >= 0) when the option expires. If Y is greater than X, you profit. If not, you don't.
In this case, if the stock did not end up over $270, then the trade did not pay out. It would have to end up at $270 plus whatever premium was paid to make a profit overall.