Free Republic

The trader sold 19,000 put options on the S&P 500 Index obligating him or her to buy the market benchmark at 2,100 on Dec. 18, 2020, data from New York-based options analytics firm Trade Alert showed. As long as the index doesn't drop more than 22 percent from its current level of 2,582 by that date, the bet will earn the trader roughly $175 million in premiums. Buffett's Berkshire Hathaway sold billions of dollars in stock index options between 2004 and 2008, betting that markets would rise over the next 15 to 20 years. Although the trades were made anonymously,...

In the weeks preceding the 2001 attacks on America, there were very significant financial warning signs that something big – and bad – could be about to happen. Huge surges in purchases of “put options” on stocks of United Airlines and American Airlines, the two airlines used in the attacks, and “put options” on Merrill Lynch & Co., and Morgan Stanley, stocks of two financial services companies hurt by the attack were noted. Put options are essentially “bets” that a stock or stock index will drop on or before a certain date; the larger the drop, the bigger the gain...