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

Originally posted by pavil
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.

We're not talking about a bear market here, which takes place over years. We're talking about 30 percent drop in FOUR WEEKS.. Again, the only time there's ever been that big of a drop in that short a time was the stock market crash of 1929. The 47 percent drop you talk about comes from comparing prices that were two years apart.

Originally posted by djohnsto77

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."



[edit on 8/27/2007 by djohnsto77]

Here's a link for the S&P 700:

S&P 700

I'm assuming they meant S&P because the only evidence I could find of an "SPX 700" index after a Google search were references to this story.

Well now. Today is starting to be a busy news day. first the Gonzales resignation, and now THIS. I'd be interesting to hear what everyone has to say.

Update: it's being reported that Homeland Security boss Michael Chertoff could be the Bush pick to replace Gonzales.

[edit on 27-8-2007 by Justin Oldham]

Originally posted by Justin Oldham
Well now. Today is starting to be a busy news day. first the Gonzales resignation, and now THIS. I'd be interesting to hear what everyone has to say.

Update: it's being reported that Homeland Security boss Michael Chertoff could be the Bush pick to replace Gonzales.

[edit on 27-8-2007 by Justin Oldham]

It's weird start to the day. Very odd.

Michael Chertoff is an odd pick, if selected.

Originally posted by Agit8dChop
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.

well the investigation by the SEC (regarding 9/11 insider trading)

went something like this

An October 19 article in the San Francisco Chronicle reported that the SEC, after a period of silence, had undertaken the unprecedented action of deputizing hundreds of private officials in its investigation:

The proposed system, which would go into effect immediately, effectively deputizes hundreds, if not thousands, of key players in the private sector.
...
In a two-page statement issued to "all securities-related entities" nationwide, the SEC asked companies to designate senior personnel who appreciate "the sensitive nature" of the case and can be relied upon to "exercise appropriate discretion" as "point" people linking government investigators and the industry. 17

what does this mean? (link at bottom)

Michael Ruppert, a former LAPD officer, explains the consequences of this action:

What happens when you deputize someone in a national security or criminal investigation is that you make it illegal for them to disclose publicly what they know. Smart move. In effect, they become government agents and are controlled by government regulations rather than their own conscience. In fact, they can be thrown in jail without a hearing if they talk publicly. I have seen this implied threat time and again with federal investigations, intelligence agents, and even members of the United States Congress who are bound so tightly by secrecy oaths and agreements that they are not even able to disclose criminal activities inside the government for fear of incarceration. 18

nothing to see hear, the psychology of belief systems within individuals makes it very easy to deny belief in something that goes against the system of beliefs an individual holds because that system provides safety for that person (a comfort zone) if you will

obviously with millions of different people and different beliefs, the system that works for someone maybe different than someone's elses, however there will be many similarities. it all comes down to the way different things are represented in the human mind when they are thought about or brought up. it all comes down to what YOU ARE WILLING TO BELIEVE, and i think this understanding takes time to comprehend and can be overwhelming. i think most people see themselves as decent people no matter what they do, i think they rationalize there behavior (even if they are seen as arrogant, always right, short-temported or what have you) because they have there own set of beliefs that gives them enough comfort in life and while there certainly may be better beliefs to have, they simply do not understand how that they can change their beliefs and get the same level of comfort and they wouldn't know how to in the first place, or that the process of doing so would make them accept responsibility for there actions, as well an incur a decent amount of will to see the transtion through, so instead they feel helpless, or angry, or alcoholics,or turn to god, (to give their belief systems power and security) again their is many beleif systems that will do this, and god happens to be one of the oldest and most exploited (taken advantage of by those who understand this)

bottom line we live in crazy times, believe what ever tickles your fancy , just because that belief works doesn't make it TRUE it just means that perception is reality. and to maintain that rosy picture people bury their heads in the sand without even allowing themselves to be willing to beleive something, and with a busy life style and social conditioning this becomes convenient.

sorry for veering off topic

911research.wtc7.net...



[edit on 27-8-2007 by cpdaman]

Folks -Alex jones is about to cover this topic now!on GCN,may be worth a listern.

Quite literally now this minute after the adverts-see what take hes got on it.
Although it may be obvious.Sorry for the second post,

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.

What about all the put options on the airlines used in the 9/11 attacks? Do you see any coencidence there? If so, then why not here?

reply to post by INOTIBOT


I heard on a VT rock radio station (WEQX) that they were doing some 'mass casulties test that included fire/police/ambulance and some helicopters'. The DJ jsut randomly said this between playing songs....

Is anyone from VT to see if there were anyother news reports of this?

Originally posted by ClintK


We're not talking about a bear market here, which takes place over years. We're talking about 30 percent drop in FOUR WEEKS..

And the most apparent explaination for this speculated 'Plunge' is....

that 21 Sept is following the next Federal Reserves 'Prime Rate' announcement/
I see the Fed as taking absolutely No action to reduce the Prime-Rate,
they'll let it stay where it is now so that all those ARMs can re-set at
the increased payment rates all through January thru June of 2008.

see, last weeks 'overnight bank rate' cut of .50% points was only for the
major market funds/investors/brokerages to secure cheaper 'Liquidity' monies... the masses with increasing mortgages are considered 'dead-meat' and are being sacrificed
There isn't a Govt. mortgage bail out coming (for the middle class) as many sorta expected when the Fed cut the Discount Rate last week (as a short term measure to provide temporary liquidity for the big lenders who provide jobs)
And that slap-in-the-face Realization will affect the broader spectrum of credit & credit cards in general- - - in a very negative way.

that's how i see 1 possible scenario.

thanks

St Udio,
That's probably a reasonable assumption. I can see an easy 10% drop if the Fed doesn't cut rates, or there isn't some type of Congressional action.
Also looks like it's not just us "tinfoil hatters" noticing the large number of put on the S&P anymore.
www.cnbc.com... they are mentioning the puts not the calls that got this thread going though.

Originally posted by jefwane
www.cnbc.com... they are mentioning the puts not the calls that got this thread going though.

great find, have a star

this part of the article should scare you

Some investors are even buying put options calling for 52% decline. A "put" option increases in value as the underlying stock or index falls.

To put it in perspective, a 5% drop in the Dow Jones Industrial Average would be the equivalent of 667 points. An 11% decline would equal 1,468 points. And a 52% drop? You don't even want to know.

The Fed should lower rates, but I dunno if they will.

It would never reach a 52% drop. There are safety measures in place to prevent such a drop. It would sit stagnant if another terrorist attack occured. The market will not stay open and be allowed to drop over 6000 points without some type of pause in trading until things stabilized. I could imagine a 2000-3000 point drop at the end of it all, but even then, that is recoverable.

reply to post by infinite


Sad that when Greenspan left he probably knew the mess the markets were going to be in a very near future.

Now Bernanke is finding himself in the wrong place in this time in history, so far the moves that the fed has done, looks like a bail out for the financial elite.

The liquidity pump in the markets has not been enough to stop the market drought, the only way to save the dollar is to lower interest rates period.

Somebody needs to start thinking about the nation rather than the financial elite.




[edit on 27-8-2007 by marg6043]

Originally posted by infinite8
It would never reach a 52% drop. There are safety measures in place to prevent such a drop. It would sit stagnant if another terrorist attack occured. The market will not stay open and be allowed to drop over 6000 points without some type of pause in trading until things stabilized. I could imagine a 2000-3000 point drop at the end of it all, but even then, that is recoverable.

I don't think they are talking about in a single day. Over a period of time. During the great depression, the market did drop 50% over the period.

[edit on 27-8-2007 by infinite]

You can't keep the markets closed becuase it's dropping bricks.. Closing the markets or having the brakes applied won't stop the fall either.

Originally posted by jefwane

Also looks like it's not just us "tinfoil hatters" noticing the large number of put on the S&P anymore.
www.cnbc.com...
they are mentioning the puts not the calls that got this thread going though.

well, it seems the info that got this thread started was erroneous to begin with...

i found (along with others following this out-of-control rumor) that SteveQuayle.com had a first hand report on the skewed up facts
that got to be centered on the S&P here in the U.S.

completely wrong...
a few of us hasve been saying that the alledged option puts were at the indentified SPX 700 (which ohers were adament actually meant the USA
S&P 500 Index)
both had wrong info from a errored source...

the article i read today identifies:

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... (currently the index is at 4,100)

...the position covers 245,000 put options on the index
...the position covers a notional EU 6.9Bn

Source: www.financialnews-us.com...

*also found at www.stevequayle.com


PS: the DJ Eurostoxx 50 index is closer to the ballpark of an SPX700
than anything related to the U.S. S&P 500 index...
so all the 'sky is falling' about the 'put' options bet, that the US economy or that a terrorist accack is emminent is pure & baseless bunk....
at least concerning the 6.9 Billion EU 'put' options

7 pages of wildly, increasing circles, an exercise of imagination & suppositions.... only mildly entertaining at that


have a good night ya'll, thanks,

I've been following this post for a few days now, very interesting the different opinions being expressed. Related to this subject, is anyone familiar with JACKSON HOLE, WYOMING ? Is there any truth to the rumor that there is a COG in Jackson Hole? (Continuity of government facility?)

On another board I found rumors coinciding with this issue that include The Federal Reserve Board meeting at this location so that they can utilize the COG and be protected.

Federal Reserve Board Calendar

This appears to confirm the meeting location, but I am not familiar with the claim pertaining to there being a COG facility in this location.

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

Actually DJohnsto is right, they are referring to SPX calls at strike 700. Additionally they are talking actually about 2 different securities in this case, well 3 if you consider this latest poster talking about European options, which is another topic again.

The actual thing that started this thread is the SPY option chain though, not this SPX.

The SPY chain is shown here...

SPY option chain

Look in the left column at the calls, there are 12 different strikes that have about 10k open interest on each. For example search SWVIH on the page and look at the volume which is 10000, and open interest which is 12308. This is what they are talking about, one entity made those 12 transactions in those strikes. So add up all 12 of these 10k transactions, and you get 120 thousand contracts which leverage 12 million shares, which are priced at $146, so you get ~1.7 billion dollars in stock value.

Now this is being overblown, as any fool knows they are not flat out just selling these options hoping for a crash, they are hedged in some manner, so there is nothing in the range of 1.7 billion dollars bet naked. That is ridiculous. For example they could hedge by selling the lowest 6 strikes and buying the highest 6, to receive cash in their account at a fairly high interest rate. Or they could be writing the calls against their accounts which hold tons of securities that they do not want to liquidate right now, but want to lock in the value.

Something like this is going on.

The other index you guys are talking about, the SPX is the S&P 500 index as shown here....

SPX Option Chain

If you load the page, and check the following areas you will see what they were talking about. Search on SPZIT, and see that the last column is 61730 open interest in these SPX 700 calls, as DJohnsto was saying. Then search on SVPUT and you will see 61740 open interest in puts at strike 1700.

These are also hedged against each other, one balances the other, so there is no massive bet being made, just a hedge, probably for cash again, just write the calls, and write the puts, and receive cash for a few weeks until the options exercise. The spreads and transaction costs make it expensive cash, but maybe with the tight credit markets, it is all they can get.

The strategies might be off, but anyway, someone can correct those details, but this is blown out of proportion IMO. It would be interesting to know exactly what strategy was being used, but I imagine whoever did it is not talking.

TheMesh.


EDIT: Also on that last page there are a lot of SPZUT puts, something like 116716, there was some interest in that also. That is what people are referring to when they say SPX 700 puts.


[edit on 27-8-2007 by TheMesh]

very well done mesh thank you


how ironic though don't let this false alarm give you a false sense of security regarding the economy and the stock market

they have been propped up by the PPT amid the mass exodus of u.s investment

the banks that run the world are private (central banks) although they were cleverly designed to sound and even appear gov't owned. they are not, they are ruthless and they are greedy and this shall be obvious soon enough

they are not subject to government policy's and they don't even tolerate discussion about this ever being a possibility! they have propped up the finance sectors thoughout the world but in the united states especially and pushed this sector forward at the expense of the other sectors! while simulataniously creating multiple housing bubbles that trap people in debt. in addition public property has been privatized quitely like gangbusters. George Bush has been the worst president in the history of the united states and Alan Greenspan set this trap and was the worst central banker ( or the best) depending on what you think his motives were.

the coming collapse will be swift and prolonged. their will be a NAU.

[edit on 27-8-2007 by cpdaman]