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

interesting topic


bets on "Foreign" markets falling 30 percent should not give American's false security that there stock markets would not be crushed as well. It is a global stock market, where small tremors in asia or europe are felt hear, and vice versa.

also who is to say that a similiar wager will not be put on domestic markets in the upcoming week(s)

one thing from the discussion that i couldn't get a final answer on was

DOES the market have to drop 30 % for the investor to profit or will a 3% drop yield small gains as well? this makes a huge difference to the SIGNIFIGANCE of this story

this is interesting and its related to this post


en.rian.ru...

I don't know much about markets but I will say this sounds crooked. Maybe a way to manipulate the market? I do know the markets have a psychological factor or element to them.

Ok.... troops in DC to defend air... Market drop "predicted" 30%.. Politicians dropping out of office Sept 1... Iran hates Israel. Bush hates Iran... 7yrs (87mnths) till 12/12/2007... (anyone think Bush will declare martial law before he is out of office?) UFO sighting now so frequent people are jaded...
Maybe it's all related, maybe not.

Just a few current events is all...

This is a very troubling story, but maybe there is nothing to it but
There is always something very unethical occuring where there is opportunity and the promise of large returns, think about this , about a week ago, 4 of the major banks had to borrow 500 million each from the FED..excerpted from the NY TIMES

The banks — Citigroup, Bank of America, JPMorgan and Wachovia — said that they had tapped the so-called discount window of the Federal Reserve Bank of New York, five days after the central bank lowered the rate and loosened its collateral standards in an effort to inject more money into the credit markets.

NY TIMES
on top of that the FED has been injecting billions the last 2 weeks into the banking system...this means the banks do not have cash...(WHERE DID IT GO??) that is in conjunction with the subprime mortgage backed securities problem.

WE ARE IN SERIOUS FINANCIAL Kemshi is what is spells out, and right now even the FED cannot control it, because this is a GLOBAL issue and worse it has been put into motion mathematically and the effects are exponential.

Also Bank of America took 2billion of the free FED Spending money and decided to invest it into CountryWide Mortgages...at around 19 dollars a share then about a day or 2 later the stock is at 23 or so, is this a quick dollar for them or what??? especially if you get that FED Free money??

I am telling you the entire system is so corrupt and greed ridden it is ridiculous and everyone should face the facts, we are in big trouble, even without a terror attack and we as Americans should wake up to the fact that this whole ugly scenario of collapse and possible war is going to precipitate much quicker than anyone can realize, all of the troops are across the water, we don't have reserves or national guards here and there is no hurry to replenish them.....can't you see the reality unfolding??? it is here, most assuredly the calamity of ages, in our timline of history is hovering and there is no stopping it because anyone that understands what just just happened with the junk stocks and mortgage backed securities, and how it has infected like a contagion all levels of stocks and bonds, all banks and everyone else that thought they could make a quick buck off of almost guaranteed investments...mortgages, except made to people who could not pay them back, thus 0 returns on investments....



[edit on 26-8-2007 by phinubian]

[edit on 26-8-2007 by phinubian]

Originally posted by INOTIBOT
this is interesting and its related to this post


en.rian.ru...

hrrm, interesting article.. it just goes to confirm that what alot of us on here think is in the works of the administration. How does that apply to this topic though?

Is it possible that these put options are a double edged sword then?
Maybe the global (world banks) are investing in the possibility of their own collapse on the hopes of failure, and if the collapse does not happen... is it possible that if the said collapse does not happen, just the bets places on the "puts" would cause enough loss of money from the contibutors to instigate a collapse on its own?

It seems like a paradox, but I have been indulging in my own fuzzy logic of adult beveridges tonight.

keep an open eye all

(edited for sober cohesion)

[edit on 26-8-2007 by telemetry]

heres a mock nuclear test in oregon!!!!

www.indymedia.org.uk...

Originally posted by INOTIBOT
heres a mock nuclear test in oregon!!!!

www.indymedia.org.uk...

I think we have all heard of ONR occuring in the Portland area, due to numerous threads on it. I can't take much stock in that, since ONR was to supposed to take place in August if I recall Right? In fact, I myself will vacationing on the Oregon coast, not too far from Portland.... drumroll please.... September 12-21.

in all seriousness, could this be a way to initiate the "one world dollar" so to speak? Maybe someone is trying to level the playing field.

Just an idea

I can't believe i just noticed this. I went and re-read the tickerforum post (all 14 pages). The 12 10,000 contract options were first opened on 8-22 Friday there was volume of 10,000 on each of the strikes as well. Am i Correct in asuming tommorrow we will be able to see if it was a double down or an exit of the trade. If the open interest jumps to 20,000+ we will know that whoever did this (or an emulator) did it again. If the open interest drops by 10,000 we will know they exited the trade by buying the reverse of what they bought 8-22. I'm working under the assumption that this was some type of spread (on page 3 or 4 on ticker). The open interest on all those options is between 10-12000
If they were covered calls (not the consensus there) the open interest could stay the same (someone bought and is holding) or drop as those options are exercised.

Am I thinking right here?

I am not sure with who or why the call and puts are being done but talking about a 30% drop in the market as being unprecedented or catastrophic is plainly false. The average Bear market since 1929 has been about a drop of about 38%. The last one in 2000-2002 was about a 47% drop.

Yes it sucks, but it still is not the end of the world. Our Bull market we have had for about the last 5 years has almost run out of gas. It's up to the individual investor to decide to get out while things are still relatively good or just wait till the market drops the average 38%. Gamble that the market will recover if you want, but you are betting against the trend. The average Bear market last about 1 1/2 years but it takes the average investor 5.2 years to get back to where they were before the Bear. Don't be dumb and try and ride out the Bear, it's a treadmill to nowhere. Park your money and wait for value to return to the market. Remember, Sell High and Buy low. Don't reverse it.

Yeah, I realize that Bear markets happen but a 30% drop in just over 3 weeks? I find that highly unlikely with a Fed intervening heavily, trading halt rules, and lots of money on the sideline bargain hunting. I think only some large terror event, new war, or complete meltdown in banks. I just don't think the odds are that great without some catalyst thats not currently public knowledge.

Heck, just in trying to wrap my head around this i have a better understanding of option strategies. It interests me and I'm learning something. Someone with deep pockets has placed a big bet, and I'm interested in seeing how it plays out. Kinda like being at a casino table when a high roller comes up you just gotta watch. I'm waiting till tommorow to see what the open interest numbers look like. I think someone may have mentioned a "bear trap" theory, and what the OI looks like tommorrow may tell that.

[edit on 26-8-2007 by jefwane]

Originally posted by pavil
Remember, Sell High and Buy low. Don't reverse it.

Unless of course you are selling Short ;-)

Originally posted by Quazga

Originally posted by pavil
Remember, Sell High and Buy low. Don't reverse it.

Unless of course you are selling Short ;-)

The vast majority of investors don't have a clue about calls and puts, thankfully.

Thats a lot of money to put on a game of chance, especially when the ods are stacked up sooo badly against you...

Sept11 showed us, that if you use your advanced knowledge of an oncoming event to create profits through the stocks.. then the government will not investigate you so long as you know, or 'are' the correct people.

So If something does eventuate that means this lucky gambler comes off rich, he'd have nothing to worry about. Either he's involved with the terrorists ' the government ' or he knows the right people, and is doing it as a brick wall thus to hide government insider-trading.

by my guess thats 25days,the 3rd friday of september... 2 days after my birthday!

im more interested to see how the markets perform THIS week,
as it seems to me the US is banking on the interest rate, and influx of money on the market to fix the current credit woes.

If the markets continue their downward trend this week, I would say without a doubt somethings going to pop sooner rather than later.

Originally posted by Agit8dChop
Sept11 showed us, that if you use your advanced knowledge of an oncoming event to create profits through the stocks.. then the government will not investigate you so long as you know, or 'are' the correct people.

I assume you are refering to the options put on the airlines prior to 9/11. Haven't most of them gone unclaimed? Please correct me if I am in error.

not that I knew of, I remember reading about them while researching another thread, they were investigated all the way to Germany, then it was revealed it was nothign sinisiter nor curropt and the case was closed.
Ill try to have a squiz.

I wonder if someone would care to explain how the stock market works, and what can go wrong Ive got a vague idea but it mostly confuses me seeing as I´m not a business man.

It just seems like loads of people buying and selling things which don´t actually exist all day.

I watch various business programs on CNN and others but it generally bores me to death.

www.telegraph.co.uk.../money/2007/08/27/cnusecon127.xml

Those words from an ex secretary is going to hurt the market this week.
Not gonna be pretty when the markets open.

The markets are not stable at the moment, this is bad news for them.

It does seem we have been building up to a crash for the last three years. The markets have grown at a rapid rate, especially China. 23% for the year!!

Insane.

[edit on 27-8-2007 by infinite]

reply to post by djohnsto77


The SPX 700 is the S&P 700.

Originally posted by ClintK
The SPX 700 is the S&P 700.

Can you please post a reliable source for that?

"SPX" is the unique symbol for the S&P 500. Other S&P indices have different symbols, the S&P 100, for example, has the symbol "OEX."

I'm not even sure that any derivatives (options and/or futures) are even traded on this S&P 700 index, I haven't seen any reference to it after several Google searches. But rest assured that if there are such things, they trade under a different symbol, not "SPX."

[edit on 8/27/2007 by djohnsto77]