One possibility is that it may be part of some complex hedging strategy or some kind of relative value arbitrage.
I would be interested in your thoughts
Of the exchange could simply refuse to close the options and they lose either way.
This is the third or fourth article I’ve read about these trades and I have yet to see one written in English. Can you translate it for those of us not into The Market?
Clearly? that's an awfully big assumption, looks like a bunch of people got together to risk their money on the spin a giant roulette wheel.
If something big happens here this month, something big better happen over there, really big.
Thermonuclear big.
Hey Congress and DC elites: we citizens have had it. One more terrorist attack on innocent Americans like 9/11, you better take care of business, no holds barred.
We don’t intend to live the rest of our lives in fear. And we don’t intend for our children to live in fear.
Seal the borders, deport the illegals, and tell CAIR this is America, not downtown Riyadh.
Someone posted awhile back that there were similar call bets that the market would shoot up over the same time frame. I don’t know how this stuff works.
Its a HOAX folks. Ive called my broker and theres been no such trading activity
ping to you, stay safe
“Follow the money”
George Soros smells of this.
Or someone—say Soros—manipulating the market again.
Simply put, the Dow or S&P doesn't have to drop 40% in order for a 40% short to pay off.
Not that I understand it but: http://www.thestreet.com/newsanalysis/optionsfutures/10377063.html
"DEBKAfile’s military experts conclude from the way Damascus described the episode that the Pantsyr-S1 missiles were a letdown because they failed to down the intruders and therefore leave Syria and Iranian airspace vulnerable to hostile intrusion. Such information on the Russian weapons systems sold to both countries is essential to any US calculations of whether to attack Iran. "
Certainly you do not believe our or other politicians, friend or foe, are beyond making some money off of inside info?
Like betting the number 13 on roulette every friday 13th?
"The most dangerous place in the world today is not Iran or Iraq," U.S. Rep. Randy Forbes, R-Chesapeake, said in an interview. "It's the Taiwanese strait."
Forbes said an eight-day trip to China last month gave him a freshened sense of the country's growing economic and military strength and heightened concern about possible Chinese moves against Taiwan.
The options will be sold (bought?) on 12 Sept. It's a fair amount of money, but the potential return is huge. If it doesn't work out, at least it wasn't a total gamble.
OK FOLKS, LISTEN CAREFULLY!!!!
These are CALLS, not PUTS. CALLS are options to BUY the item, not options to SELL. These are not "700 points" out of the money, but are in fact almost 700 points IN the money.
In other words, they are ALREADY worth $4.5 billion dollars.
People buy calls like this all the time. They have almost no "time value", and there cost is almost equal to the cost of the shares. And they move pretty much in step with the underlying stocks.
So they are a simple way to purchase twice as much stock without having to go on margin loans.
To buy that much of the SPX 700 would cost twice as much money.
There ARE a large number of PUTS also, but they could have been years old and just coming to expiration. Someone could have bet against this stuff a couple of years ago, and once they are worthless there's no point in selling them.
BTW, I can't find the price on the "750 puts", but I guarantee you they aren't even going to cost you a dollar, meaning 65,000 of them would only cost you 6.5 million, not billions.
Think about it. If someone offered you a billion dollars to sell to them the chance to force you to buy the SPX 700 at 750 dollars a share, wouldn't you take the money and run? So would anybody with a brain.
One more thing. If you buy a PUT, it means you can force someone to buy the item from you at that price. They way you make money is that if when it comes due, the item is cheaper, you could BUY the item at a cheaper price, and force people to purchase it from you.
SELLING PUTS is the most dangerous thing to do, because you CAN'T protect yourself, and can be forced to purchase worthless stuff. But you DO know your maximum loss, which would be whatever the strike price is.
SELLING CALLS is the most "risky" thing from a total loss perspective, but is actually pretty safe if you don't mind leaving money on the table. You just buy a stock, and then sell to someone the right to buy it from you at a price. You put money in your pocket, and at WORST you have to sell the stock at the price you agreed to. But if in the meantime the stock doubles, you've lost all that gain.
Selling calls on stocks you own that don't move is a great way to add a little bit of extra money to your portfolio each month.
Anyway, wanted to clear up the confusion about these 65,000 CALLS, not PUTS.
The fact that they will become widely known will probably make them worthless.
If some huge plot is foiled in the next couple weeks there will be some real sore losers.