reply to post by xSMOKING_GUNx
Well, now that I have the time I would like to discuss this further. Just for a little recap let's talk about what put options and short sales and
A put option works like this, say there is a stock at 65$ a share. You think for whatever reason it is going to drop substantially. You come to me
and we reach an agreement that says you have the option
(not the obligation) to sell me 100 shares at $60 per share within an alloted time
frame (usually 6 months or a year). If you exercise that option, I, the seller of this contract is obligated to buy those shares at the agreed price
of $60 regardless of what the actual value is. For this contract I charge you the difference $5 a share in interest.
If the price per share falls to say $40 a share before the contract expiration. You the holder of the option can buy those at $40 and sell them to me
So, you paid me $500 for the option bought the 100 shares for $4000 and sold them to me at $6000 and I was obligated by the contract to buy them at
that price. Long story short you made $1500 off the transaction.
Or lets say the price did not fall below the $60 per share price by the end of the contract. You will not exercise your option to sell me the shares
at $60 because you can not replace them for less than that. I keep the $500 you paid me for the contract and you loose $500 dollars.
Now on to the short sales. You feel that the price of a particular stock is going to drop by a substantial amount. You go find someone who is
willing to loan you 100 shares of that stock. You turn around and sell them to me for the current price they are selling at, we'll say $65 a share.
I give you $6500 and I now own the shares. If the price drops to $40 per in the alloted time you agreed to return the shares to who you borrowed them
from. You buy 100 shares for $4000 and return them, making $2000 out of the transaction.
But, here is where the put option and short sale differ. Lets say the price of the stock rose to $75 a share with the short sale you are obligated to
replace the borrowed shares regardless of what the market price is. So if the price went up to $75 a share you just lost $1000.
I personally feel that you will have little luck if any finding out who did what in either of these categories. But if you are feeling ambitious and
have a couple months+ of your life with nothing better to do you might start by looking into U.S. Securities and Exchange
reports, they don't really do their job they just hand out slap on the wrist fines to people who have made billions manipulating the
market. There is also the The Depository Trust & Clearing Corporation
, I don't even know if they have reports available
to the public but it might be worth looking into. The DTCC in the "clearinghouse" behind wall street. Like when large sums of money (not actual
money but numbers over a wire) are transfered between banks it goes through a clearinghouse. The DTCC handles the wire transactions between large
brokers and wall street. Now if you want to know just how much of a role they play here is a number for you $1.4 quadrillion. Thats not a misprint
thats 20 times the WORLD
Gross domestic product and the amount of transactions the DTCC handled last year.
If I were you and you really want to look into this I would look into whats called "Index funds". Index funds are basically a mutual fund that has
investments in so many parts of the market that the share price follows dollar for dollar with the DJA. For example right now the dow is at 4,150.35
which means each share is $4150.35 if it drops 100 points the share price drops $100. If there is a place for big investors to make a lot of money
it would be by putting put options on these index funds. If the market drops 500 thats $500 per share to be made. Hope it helps but the stock market
is anything but transparent unless regulatory commissions get involved and still then not very. Rich people don't get rich by making careless
mistakes, and they cover their tracks quite well.
[edit on 073131p://333 by shizzle5150]