Put Options Foresee Terror Attack?

[parky76]

Here we go folks. I picked this up from TNRlivecom.

Supposedly, some genius made a multi-billion $ bet that the European market will crash by 30% by September 21st.

This was confirmed in the Financial Times here

http://www.financialnews-us.com/?page=ushome&contentid=2448565379

So what do you think? Someone have some inside info about an upcoming terror attack? Or some Irishman simply betting on hard economic times ahead.

Lets not forget that people in the USA did predict 9-11. Like that Pakistani kid in the Brooklyn school. Somehow, people did know.

[Hans]

It's probably part of a hedge strategy - check to see if there is a corresponding Long position.

[parky76]

there is a market forum that discusses this. but I must admit, i could not understant a darn thing they said. and yes, there may be some more market strategy reasons for this and not pre-knowledge of an upcoming event.

[~enigma~]

there is a market forum that discusses this.
Then why post this here?

[jaydeehess]

Well Sept is nearly upon us. Have put options on the airlines been placed yet? You know, like they often are?

[T.A.M.]

given the downward slide of the Dow and other indices, does it come as a surprise that SOMEONE would hedge on this??

TAM:)

[parky76]

Well, if someone put put options on the Dow losing 1,000 points in 3 weeks, someone would have yelled "false-flag coming!!!"

the Dow did indeed fall about a thousand points, but no terror attack has occured.

[T.A.M.]

To answer your question in the OP, I am going with "Irishman betting on economic hard times ahead".

TAM:)

[jhunter1163]

Hey, TAM.. should I short or long Kool Vax futures?

[T.A.M.]

I think they are looking good short...but come final quarter 2008, they will plummet, like the 9/1 truth movement.

TAM;)

[Jonnyclueless]

OMG!!! You have uncovered the trooof!!!

People having put options on a failing industry???? My God, what were they thinking?!?! Why would anyone want to make a profit on stocks that are knowingly going down unless it's part of some diabolical plot.

Of course the only purpose for put options being created was to help in the event of large scale diabolical plots.

[jhunter1163]

Thanks for the tip. And, if any SEC guys come nosing around, I'd appreciate you telling them that you're in Canada, eh, and that they should take off.

(And yes, I know Canadians don't all sound like Bob and Doug McKenzie)

[T.A.M.]

Thanks for the tip. And, if any SEC guys come nosing around, I'd appreciate you telling them that you're in Canada, eh, and that they should take off.

(And yes, I know Canadians don't all sound like Bob and Doug McKenzie)

make fun of me and my canucks again, and I will have PM Harper Unleash the full power of our military upon you...

...and if that fails, I will force you to watch hockey all day long FOREVER!!!!

TAM;)

[Unsecured Coins]

make fun of me and my canucks again, and I will have PM Harper Unleash the full power of our military upon you...

What? BOTH tanks?

...and if that fails, I will force you to watch hockey all day long FOREVER!!!!
Twist my arm, why don't you?

[Drudgewire]

What? BOTH tanks?
Don't forget the submarines with screen windows. :D

[T.A.M.]

What? BOTH tanks?


well one of them is....being serviced, but the other will crush all of you...bwaahaaahaaa!!!

TAM:)

[Drudgewire]

well one of them is....being serviced, but the other will crush all of you...bwaahaaahaaa!!!

TAM:)
If the Canadian military crushes me with a tank I will sue Caterpillar SO FAST!!
http://www.lethalwrestling.com/upload/fist4su.gif

[JamesB]

I did a couple of posts on this over at my blog.

http://thechiefbrief.blogspot.com

As the Financial Times states, it is probably just a part of a hedging strategy. The conspiracy theorists have as their usual blown this story completely beyond recognition.

[dudalb]

God,Can Canada still find spare parts for their Shermans?

[geni]

Supposedly, some genius made a multi-billion $ bet that the European market will crash by 30% by September 21st.

Nope. Bet probably cost millions at most since very few people think that the market will really fall that far. In addition the 6.9bn is simply the right to sell at that price. So if the market does fall the holder of the options could only make something close 6.9bn if the market droped to zero.


So what do you think? Someone have some inside info about an upcoming terror attack? Or some Irishman simply betting on hard economic times ahead.


Neither. Someone a bit worried and looking for a fallback in the worst case senario

[Corsair 115]

God,Can Canada still find spare parts for their Shermans?Actually, the government shelled out some millions of dollars for new ones (Leopards) not long ago and recently sent 17 of them to Afghanistan to support Canadian operations there.

[Hans]

I did a couple of posts on this over at my blog.

http://thechiefbrief.blogspot.com

As the Financial Times states, it is probably just a part of a hedging strategy. The conspiracy theorists have as their usual blown this story completely beyond recognition.


Well I feel vindicated LOL

[qarnos]

Actually, the government shelled out some millions of dollars for new ones (Leopards) not long ago and recently sent 17 of them to Afghanistan to support Canadian operations there.

:idea:

Ahhh... so 9/11 was actually a Canadian government operation to give them a cover story to buy new tanks in preparation for their invasion of the USA. It's all so obvious, now. No wonder their are so many Canadians in this subforum.

[geni]

:idea:

Ahhh... so 9/11 was actually a Canadian government operation to give them a cover story to buy new tanks in preparation for their invasion of the USA. It's all so obvious, now. No wonder their are so many Canadians in this subforum.

German tanks no less.

[Unsecured Coins]

German tanks no less.

I actually have respect for the Leo 2 tank. It's no Merkava and certainly no Abrams but I wouldn't turn down a chance to go F some S up in it.

[dudalb]

Actually, the government shelled out some millions of dollars for new ones (Leopards) not long ago and recently sent 17 of them to Afghanistan to support Canadian operations there.

I Know,I was just kidding.

[T.A.M.]

CNWO (Canadian New World Order).

TAM;)

[Alferd_Packer]

God,Can Canada still find spare parts for their Shermans?

They perform nightly raids accross the border to strip parts from static displays in front of cash strapped VFW posts.

[Corsair 115]

Ahhh... so 9/11 was actually a Canadian government operation to give them a cover story to buy new tanks in preparation for their invasion of the USA. It's all so obvious, now. No wonder their are so many Canadians in this subforum.You know the old saying about how the first thing one does in a revolution is seize the radio and TV stations? Well, take a look at just how many Canadians there are in Hollywood... :D

[JamesB]

http://www.thestreet.com/newsanalysis/optionsfutures/10377063.html

As if the mortgage-market meltdown wasn't enough to spook investors, some market players expressed concerns about unusual options bets that some observers have dubbed "Bin Laden Trades."

The blogosphere and options trading desks have been rife with speculation about these trades, which are unusually large bets that the market will make a huge move in the next month. Some entity, or entities, has taken a large position on extremely deep in the money S&P 500 options, both puts and calls, that won't pay off unless the market undergoes an extremely large price move between now and the options' expiration on Sept. 21.

However, Dan Perper, a Partner at Peak 6, one of the largest option market makers and proprietary trading firms, has confirmed that the trades are part of a "box-spread trade."

"This was done as a package in which the box spread was used [as a] means of alternative financing at more attractive interest rates" explained Perper.

Simply put, two parties agree to trade the box at a price that essentially splits the difference between current rates.

For example, the rough numbers would be that given the September 700/1700 box must settle at a value of 1,000 -- it is currently trading around 997 -- that translates into a 5% interest rate.

[stilicho]

http://www.thestreet.com/newsanalysis/optionsfutures/10377063.html
Quote:
As if the mortgage-market meltdown wasn't enough to spook investors, some market players expressed concerns about unusual options bets that some observers have dubbed "Bin Laden Trades."

The blogosphere and options trading desks have been rife with speculation about these trades, which are unusually large bets that the market will make a huge move in the next month. Some entity, or entities, has taken a large position on extremely deep in the money S&P 500 options, both puts and calls, that won't pay off unless the market undergoes an extremely large price move between now and the options' expiration on Sept. 21.

However, Dan Perper, a Partner at Peak 6, one of the largest option market makers and proprietary trading firms, has confirmed that the trades are part of a "box-spread trade."

"This was done as a package in which the box spread was used [as a] means of alternative financing at more attractive interest rates" explained Perper.

Simply put, two parties agree to trade the box at a price that essentially splits the difference between current rates.

For example, the rough numbers would be that given the September 700/1700 box must settle at a value of 1,000 -- it is currently trading around 997 -- that translates into a 5% interest rate.





That kind of thing is very common among institutional investors. (I still suspect that the big put option deals on 9/11 were CALPERS or some other player like a major pension fund).

My own company lost a lot of potential gain on the CND rising about $0.04 against the USD due to hedging. We bought the derivatives to guard against a decline in the CND and, of course, couldn't exercise them because the cross-currency rate went the "wrong" way. Because we make those purchases through a broker, the money is "pooled" with others; you can really never tell whose money bought exactly which derivatives. Buyers and sellers don't meet.

The "box-spread" explanation is logical.

I have noticed that conspiracy sites and "fiat money libertarians" are vehemently opposed to the derivatives markets, seeing them as somehow dishonest (ie "creating money out of thin air"). Instead, they are just another finance tool that involves complex risk assessment techniques that didn't exist before the proliferation of MBAs and advanced analytical software. (Two other things likely to go under the knife in the Brave New World of Alex Jones et al).

[JamesB]

I have noticed that conspiracy sites and "fiat money libertarians" are vehemently opposed to the derivatives markets, seeing them as somehow dishonest (ie "creating money out of thin air"). Instead, they are just another finance tool that involves complex risk assessment techniques that didn't exist before the proliferation of MBAs and advanced analytical software. (Two other things likely to go under the knife in the Brave New World of Alex Jones et al).


We all fear that which we are too dumb to understand. Actually I must admit that I didn't think of this, despite having an MBA and having just taken a class specifically on derivatives.

This is what happens when you jump to conclusions without all the evidence. Of course in truther-land, it will all be forgotten by tomorrow.

[BigAl]

I did a couple of posts on this over at my blog.

http://thechiefbrief.blogspot.com

As the Financial Times states, it is probably just a part of a hedging strategy. The conspiracy theorists have as their usual blown this story completely beyond recognition.

Maybe I'm being naive here, but IMO it's impossible to take anonymous profit away from a stock transaction and has been for years. I have a passing familiarity with the surveillance systems that the SEC requires of a stock exchange.

[JamesB]

Maybe I'm being naive here, but IMO it's impossible to take anonymous profit away from a stock transaction and has been for years. I have a passing familiarity with the surveillance systems that the SEC requires of a stock exchange.

Well theoretically you could filter transactions through lawyers and trust funds to try and hide the origin, but I can think of no faster way of getting the attention of the SEC and IRS.

[stilicho]

We all fear that which we are too dumb to understand. Actually I must admit that I didn't think of this, despite having an MBA and having just taken a class specifically on derivatives.

So you must know then, as an MBA, about our plans: http://en.wikipedia.org/wiki/Frost_bank_tower

That's right--MBAs are working with the Bilderbergers to infiltrate Alex Jones' home town with Moloch/Owl icons.

[JamesB]

So you must know then, as an MBA, about our plans: http://en.wikipedia.org/wiki/Frost_bank_tower

That's right--MBAs are working with the Bilderbergers to infiltrate Alex Jones' home town with Moloch/Owl icons.

LOL that is too funny. Actually if I were involved I would make it look like a Husky. My loyalty to the Dawgs outweighs my loyalty to the New World Order. :D

[CJOKUSAP]

I noticed Stilicho had this to say;

"Because we make those purchases through a broker, the money is "pooled" with others; you can really never tell whose money bought exactly which derivatives. Buyers and sellers don't meet."

Doesn't that sound like a very convenient format for criminal activity to be involved in?

You sound more like drug dealers!

[CJOKUSAP]

Seems I'm not the only one who finds these methods distasteful.

"fiat money libertarians" are vehemently opposed to the derivatives markets, seeing them as somehow dishonest (ie "creating money out of thin air"). Instead, they are just another finance tool

[CJOKUSAP]

I notice no-one's coming back at this one! It is a bit tacky , isn't it?

[CJOKUSAP]

I guess your financial experts must be out for the day.

[CJOKUSAP]

I'm not going to let this one slide, either!

[Civilized Worm]

Everyone's scared you're going to turn this in to another retarded argument about fiat money.

[CJOKUSAP]

Everyone's scared you're going to turn this in to another retarded argument about fiat money.

They needn't worry , I don't even know what 'fiat money' is. Is it anything to do with small, Italian cars? There. That should bring them back out!:)

[CJOKUSAP]

Because we make those purchases through a broker, the money is "pooled" with others; you can really never tell whose money bought exactly which derivatives. Buyers and sellers don't meet.



Still no-one seems to be bothered by this little statement! I wonder why?

[Mashuna]

Still no-one seems to be bothered by this little statement! I wonder why?

Because there's no reason to be bothered by it? :confused:

What's your concern with derivatives purchases through a broker, is it just a worry over money laundering?

[CJOKUSAP]

Because there's no reason to be bothered by it? :confused:

What's your concern with derivatives purchases through a broker, is it just a worry over money laundering?

YES!

[Myriad]

Because there's no reason to be bothered by it? :confused:

What's your concern with derivatives purchases through a broker, is it just a worry over money laundering?

YES!


Amusing worry. Consider this though:

When you buy groceries at a supermarket, the money is "pooled" with other purchases in the cash register; you can never really tell whose money bought exactly which groceries. (Unless you use a club card, but that's a recent innovation, and optional.) Food shoppers and food suppliers never meet.

When you deposit money in a savings account, the money is "pooled" with others in the bank's holdings; you can never really tell whose money is used for any given bank loan or investment. Depositors and borrowers never meet.

So, are savings and loans, and supermarkets, also criminal conspiracies to facilitate the laundering of money? Should these facts bother me? Should I insist that only the actual coins and bills I use to pay $1.89 for a head of lettuce be passed on to the local lettuce distributor, with my name on it, to prevent criminal abuse of the system?

Respectfully,
Myriad

[CJOKUSAP]

Amusing worry. Consider this though:

When you buy groceries at a supermarket, the money is "pooled" with other purchases in the cash register; you can never really tell whose money bought exactly which groceries. (Unless you use a club card, but that's a recent innovation, and optional.) Food shoppers and food suppliers never meet.

When you deposit money in a savings account, the money is "pooled" with others in the bank's holdings; you can never really tell whose money is used for any given bank loan or investment. Depositors and borrowers never meet.

So, are savings and loans, and supermarkets, also criminal conspiracies to facilitate the laundering of money? Should these facts bother me? Should I insist that only the actual coins and bills I use to pay $1.89 for a head of lettuce be passed on to the local lettuce distributor, with my name on it, to prevent criminal abuse of the system?

Respectfully,
Myriad

Your facetiousness(?) has been noted Myriad, but we are not talking about the funds from the local Kwik-E-Mart!

[Myriad]

Your facetiousness(?) has been noted Myriad, but we are not talking about the funds from the local Kwik-E-Mart!


If the only difference is the size of the transactions, then my point remains valid. There is nothing sinister about pooling money from numbers of similar transactions. In a sense that's the basis for all accounting.

This is not the same as, and does not lead to, being able to make large purchases and sales anonymously, which could facilitate money laundering or tax evasion. But no one has claimed that purchases and sales of derivatives are any more conducive to anonymity than any other form of financial transaction.

Respectfully,
Myriad

[CJOKUSAP]

Listen, I'm no more an expert on the financial world than some of you are on "Who's a 'twoofer?'", all I want to know is, is the statement Stilicho made correct, and if so, does this not facilitate criminal activities?

[DGM]

Listen, I'm no more an expert on the financial world than some of you are on "Who's a 'twoofer?'", all I want to know is, is the statement Stilicho made correct, and if so, does this not facilitate criminal activities?
No, because the broker is doing the pooling and they could intimately identify the buyers. The seller may not be able too. I think that's what he was getting at.