Massive Wall Street Put Options Signal Upcoming Terror Attack

Canada Free Press ^ | 9/4/2007

[jefferson31415]

$4.5 billion options bet on catastrophe within four weeks

ANYBODY HAVE A CLUE, AS TO WHAT, THESE "INVESTORS" ARE EXPECTING?

The two sales are being referred to by market traders as "bin Laden trades" because only an event on the scale of 9-11 could make these short-sell options valuable.

There are 65,000 contracts @ $750.00 for the SPX 700 calls for open interest. That controls 6.5 million shares at $750 = $4.5 Billion. Not a single trade. But quite a bit of $$ on a contract that is 700 points away from current value. No one would buy that deep "in the money" calls. No reason to. So if they were sold looks like someone betting on massive dislocation. Lots of very strange option activity that I haven't seen before.

The entity or individual offering these sales can only make money if the market drops 30%-50% within the next four weeks. If the market does not drop, the entity or individual involved stands to lose over $1 billion just for engaging in these contracts! Clearly, someone knows something big is going to happen BEFORE the options expire on Sept. 21.

[hinckley buzzard]

Its a HOAX folks. Ive called my broker and theres been no such trading activity

Your broker is wrong. You can look it up at http://www.bigcharts.com or many other websites that display option chains. It's right there for all to see. But don't take my word for it, look it up like I did.

[SAJ]

See post #40 for a more complete analysis.

Tonight's price for the Sep 700 SPX call is 757.10 bid, 759.70 offered. ;^)

[SAJ]

Much more likely is that the huge OI, beginning about 5 weeks ago, is/was an arb play. This would account completely for the 700 calls still having a 3+ pt premium while the 700 puts are trading at a nickel.

Ockham's razor, m'friend, nothing more or less.

[SAJ]

Yes, there was some abnormal activity in airline shares' puts prior to 11 September 2001. Curiously, afaik, SEC have never nailed anyone for it. (shrug).

This particular bit of scaremongering is nonsense on its face. See post #40.

[hinckley buzzard]

Thanks for the fyi.

[ought-six]

There is no doubt in my mind that if we are hit again, and our government just sits around flogging its dummy, the American people are going to take care of business themselves. Don’t these idiot politicians realize just how fed up the American people are, and how close we are to the point of no return? Our leaders are banking on the American people being sheep; they are set for a rude awakening. Because, although many Americans (Democrats and the left in general) embrace the idea of being shorn as the sheep they are, there are a great many Americans who are not only not sheep, but are the latent warriors this country will need to survive.

[ulm1]

see post 40

[x_plus_one]

Why don’t you find a safer place to live? Not everyone is quaking in their boots...

[mad_as_he$$]

I did, but pick tornadoes, floods, hurricanes or earthquakes in Tennessee. Which do you want?

[fabian]

how awefull that some Americans are willing to make a big profit on the possibility of the murder of many of our citizens. Is money that important? Somethings gone very screwy here.

[SW6906]

Thank you both. I’ve learned something (a lot of things!) today.

[John W]

“Yes, there was some abnormal activity in airline shares’ puts prior to 11 September 2001. Curiously, afaik, SEC have never nailed anyone for it. (shrug).

This particular bit of scaremongering is nonsense on its face. See post #40.”

I took the post for what its worth. Howvever, if what you say is true about the last time, it deserves more than a shrug. Or, would we rather not know?

[Leftism is Mentally Deranged]

If there’s a big attack in the next few days all those who did this kind of trading will have to be investigated.

[SAJ]

This article, especially, is a very lame attempt at scaremongering. Trying to extrapolate the occurrence of a disaster from unusual activity in ONE strike in an otherwise huge market is simply asinine.

Nothing on McMillan's options volume watch list suggests a replay of 9/11 just now. More likely, I think, that there'll be a little foofaraw by the diaperheads in front of General Petraeus' upcoming report on the 15th.

[Earthdweller]

"Its a HOAX folks. Ive called my broker and theres been no such trading activity"

I suspect the video is a hoax as well...Most of it is frozen still frames and the voice sounds like it's going through a garbled voice filter. Check out the two different Binnys.

[LambSlave]

The basic point of the article is that the buyer of these options in only going to make money if the S&P falls 50% in the next 3 weeks (from 1453 to 700). The question this brings up is why would anyone bet such a thing.

The writer of the articleis incorrect. If the index drops a mere 200 points in the next week, the value of the options would likely more than double in value and could be sold at an enormous profit. Many option buyers don't hold them until expiration, they are just using them for leverage on a short term event.

[Blogger]

Are the put options ka-put now? Did someone just lose 1B$

[LambSlave]

Actually, if I understand this correctly, the person(s) sold deep in the money call options, which would still expire in the money today, but worth less than when he/they sold them... so he/they probably made a tidy profit. What we don’t know is if these were naked calls, or if this was just insurance against a market downturn. I don’t see anything TOO unusual here myself; with recent credit situation, if I was heavily invested in the SPX I would have sold calls too. The unusual thing is that OTM calls would seem to make more sense if these were insurance.