Billions in Put Options purchased betting that the market will crash (UPDATE: CALL MADE?)

Billions in Put Options purchased betting that the market will crash by 9-21 by 30-50%??!

www.anomalicresearch.com

OTHER THAN THE EXPECTED FINANCIAL ANNOUNCEMENTS, ANYBODY HAVE A CLUE AS TO WHAT THESE 'INVESTORS' ARE EXPECTING?

THEY DID IT AGAIN. . . . ANOTHER HUGE SALE OF OPTION CONTRACTS ON $4.5 BILLION WORTH OF STOCKS BETTING THE MARKET WILL LOSE 30%-50% OF ITS VALUE IN FOUR WEEKS!

(visit the link for the full news article)


Related News Links:
www.tickerforum.org



UPDATE

UPDATED INFORMATION - AUGUST 28, 9:30 PM EST

Many sources are now indicating these options were called and profit made.



[edit on 26-8-2007 by SkepticOverlord]

Whoever is willing to bet $4.5Billion seems to be pretty sure of his bet. I remember a scandal in Israël not too long ago about a minister selling some of his stock just before the invasion of Lebanon started.
Could this be a similar case?

Is the war with Iran at hand? Or what other big news might have an impact of this kind on the market? Terrorist? ET's?

What is clear is: someone thinks they know something. Maybe the rest of us will too soon enough?

www.anomalicresearch.com
(visit the link for the full news article)

[edit on 25-8-2007 by sn00daard]

I've seen this story lighting up lots of other conspiracy-minded boards.

Help me out here... what is "SPX 700"

Is someone mis-abbreviating an ETF or Spyder fund (SPY)?

I've seen lots of buzz, but have been unable to confirm. Anyone?

This looks to be the origin: tickerforum.org

Originally posted by SkepticOverlord
Help me out here... what is "SPX 700"

It looks to me like they're talking about call options to buy the S&P 500 at the 700 level, less than 1/2 its current value.

From what I gather someone is writing all these way-in-the-money calls for no apparent reason. Whoever is doing this would stand to earn a great deal of money if the market collapses, but probably wouldn't lose too much if it didn't since the option premium should be pretty low on these since they're so in the money.

SPX 700 is the S&P 700 - S&P Global 1200 minus the S&P 500.

The conspiracy-inspired hysteria seems focused on the belief that "someone" is aware of another big attack coming. While this might be a sound knee-jerk response from "Tin Foil Hat Brigade," I'm not so sure... these trades are very traceable. I just can't buy the idea that these trades are initiated by someone with information about a new attack.

Originally posted by Duzey
SPX 700 is the S&P 700 - S&P Global 1200 minus the S&P 500.

SPX has to be the S&P 500. They're talking about the 700 point calls on that index. I'm 100% sure.

reply to post by SkepticOverlord



It could be simply a large "pump and dump" type scheme. you know those faxes and emails hyping a penny / pink pages stock. Get enough people to buy to bump it up a few cents and the instigator sells taking the gain.

Thats a heck of alot of money though to tie into the scheme.

As you said, its all traceable, so someone would have ALOT of explaining to do if there was IMHO.

Im looking does anybody know if any key economic data is due out in that time frame? I mean if say housing start plumeted or several sub and prime lenders were going public with huge losses that also could be an effect.

If Bin laden or other terrorist group is doing it, you bet the Feds will shut down the market and halt those transactions and sezie the money.

I posted this is in the Other Current Events thread:
The Bin Laden trade: $2 Billion bet markets will crash in less than 3 weeks

There's an interesting update..

According to www.tickerforum.org thread,
someone has placed similar bets on the European market:

Mystery trader bets market will crash by a third

An anonymous investor has placed a bet on an index of Europe's top 50 stocks falling by a third by the end of September, as world equity markets plunged for a third day and volatility hit a three-year high.

The mystery investor has bought put option contracts on the DJ Eurostoxx 50 index that will result in a profit if it plunges to 2,800 or below by the end of September. Based on the 2,800 strike price, the position covers a notional €6.9bn, and potentially even more using a market price of about 4,100 when the trades were done on Tuesday and Wednesday.

Ok, now what does this mean?

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!

I have no technical knowledge about this at all so I cant vouch for the validity of these claims (maybe someone else here can?). However, if they lose $1 billion on a $4.5 billion investment, if the market does not crash, they must have SOME reason for doing this, no? Maybe a big laundring operation for drug money?
Anybodies guess, i guess.

9-21= end of summer
Chertoff warned, cheney, recent hysteria and scare tactics. Either this is to make us fearful or its all playing out. Either way, no matter how much we argue, theres no way to know

Originally posted by SkepticOverlord
The conspiracy-inspired hysteria seems focused on the belief that "someone" is aware of another big attack coming.

I tend to agree, because it is a misrepresentation to say this type of trade would make money only if the market went down by that much. In fact, you'd make a slight amount of money if it stayed at exactly the same level until expiration. The only way this trade would lose money is if the stock market goes up. Any move down would be profit, doesn't need to be a crash.

reply to post by djohnsto77


If you're that sure, I'll believe you. You've never lied to me before.

I wish that tickerforum were as cool as ATS and had a thread button. The user Genesis seems to be quite on top of the situation.

SkepticOverlord
I just can't buy the idea that these trades are initiated by someone with information about a new attack.

Agreed. Related to an attack does not make sense.

Originally posted by djohnsto77
Any move down would be profit, doesn't need to be a crash.

It's pretty interesting if you take some time to scan around the typical places where people discuss stocks. The original source tends to lean "doom and gloom" in the tone of their discussions... and if you lurk around other more balanced areas, especially Yahoo Finance chatter, there's not much mentioned about this.

It could be a big, extensively-exposed hedge fund looking to force the market down just by the extreme nature of the bet. The market is currently so driven by fear and uncertainty, that it'll probably work. It's an old day-trader tactic on a massive scale.

Let me start by saying that I don't know anything about money, because I don't have any money. Or is it that I don't have any money because I don't know anything about money?

However, when all this buzz about mortgages and the stock market started, my interest was peaked because of a murder case I heard as a grand juror last year.

It is a matter of public record, so there's no problem with discussing it here.

In all my life, I have never heard anything more bizarre.

A couple was murdered in their home. There were precious few clues and the police fingered the daughter as a likely suspect and hounded her for probably a year.

Finally, an employee of Countrywide here in ABQ, showed up at the Secret Service office and turned himself in for forging checks. He was very upset and was actually making a case to the Secret Service for sending him away on these charges for a very long time.

The Secret Service agent told him there was nothing really to worry about. What he did was wrong, but he had no criminal history, so he would have to make restitution, maybe pay a fine and as long as he learned his lesson, life would go on.

The more the man heard this the more distraught he became, which raised suspicions that there must be more to the story.

The Secret Service agent started investigating the matter and somehow found a link between this guy and the murdered couple. He was their mortgage broker, or whatever.

For some reason, this guy (his name is Santiago) couldn't bring himself to turn down anyone for a loan. He even had a history of making mortgage payments for his clients.

In the case of the murdered couple, he had told them that their check was in the mail, when in fact, the loan had been turned down. So the couple was writing checks on the money they thought would be going into the bank and those checks were bouncing.

As it turned out, Santiago entered their upstairs bedroom from a balcony early one morning as the couple was dressing and shot them with a Ruger 9mm pistol.

The ballistic evidence was traced to Santiago and bullets found in his home.

The evidence was such that a true bill had to be returned, but we wanted more in terms of motive.

Was he somehow pocketing money from Countrywide? The answer was no.

Did he benefit in any way from his paying clients' payments or telling clients they had been approved when in actuality they had not? The answer was no.

I came home that night and did some research on Countrywide.

On the web, I found a site put up by a disgruntled customer and there were many other complaints there about all kinds of shenanigans taking place at Countrywide.

Still, there was no rhyme or reason to why this guy would go so far as to murder a couple over a denied mortgage and attempt to murder another couple. Yet, the evidence was far beyond what it would take to return a true bill on this case.

It was too much for me to wrap my head around, so I just forgot it until now.

Now for some reason, the whole country (Countrywide?) and maybe even the world is sitting on pins and needles watching the markets and you know who started it all.

Is there a conspiracy here?

Was this mortgage broker so caught up in a scheme so big that he acted in this bizarre way?

Was he the canary in the the mortgage mine?

www.abqtrib.com...

www.ripoffreport.com...

www.examiner.com...


[edit on 2007/8/25 by GradyPhilpott]

This could be nothing. 9/11 this year is also on a Tuesday. I have no idea about stocks, so this could just be my paranoia.

Interesting that also the story is in Smart Money web site, I don't know if is linked to the probability of another attack.

But we always going to find some investors with inside information that can not stop from betting on anything if they have the money to do it.

Grady that is some story you got there specially when countrywide is our mortgage holder.