If you buy puts, MM sold puts and will sell shares against since he is holding a deltaLong position from selling his puts (he makes money if the underlying goes up and lose money if the underlying goes down (which is why you bought the put). To hedge that risk he would sell shares against the sold put so that the risk of the underlying move would be covered.
Re:Dow Hits 20000 for First Time
by elastic_church on Wednesday January 25, 2017 @03:53PM
(#13485967)
you're right, but yes the concept I'm referring to was staying delta neutral. When people close their put options before expiration, the MM's create buying pressure.
In one way, the more people that bought put protection on their stock portfolio created the bullish pressure that took weeks to unwind.
(When you buy puts, the market maker is going long the stock as their own hedge. most akin to a bookie)