Trader Makes Huge Bet of 11 Million Something Bad Will Happen Within 60 Days...

This is crazy. Someone is awfully confident to risk 11+ million. According to the article this type move up in the VIX is usually accompanied by a drop in the Stock market. Any traders heard about this?

"In past years I have reported on trades that were so large it appeared someone had inside knowledge of a pending event. Sometimes those were massive put positions on the S&P. A new trade just appeared that suggests there will be a market event in the near future. Last week somebody put on a call spread on the VIX using the April 20 and 25 puts. They bought 150,000 contracts for a net of $75 per contract. That is an $11,250,000 bet that the VIX will move over 20 over the next 60 days. You would have to be VERY confident in your outlook to risk $11 million on a directional position with the VIX at five year lows and the markets trying to break out to new highs."

Read more: www.businessinsider.com...

reply to post by hawkiye


Need a little background on the trader. If he's Israeli, might be an indication of war.

Hmmm something is up here I decided to see if anyone else was talking about this huge bet here is another article that mentions several bets and Corporate insiders dumping huge numbers of shares... Stay alert you never know when the big one will hit.

Do Wall Street insiders expect something really big to happen very soon?

Why are corporate insiders dumping huge numbers of shares in their own companies right now? Why are some very large investors suddenly making gigantic bets that the stock market will crash at some point in the next 60 days?

Do Wall Street insiders expect something really BIG to happen very soon? Do they know something that we do not know? What you are about to read below is startling. Every time that the market has fallen in recent years, insiders have been able to get out ahead of time.

David Coleman of the Vickers Weekly Insider report recently noted that Wall Street insiders have shown "a remarkable ability of late to identify both market peaks and troughs". That is why it is so alarming that corporate insiders are selling nine times as many shares as they are buying right now.

In addition, some extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S. crash by the end of April. So what does all of this mean? Well, it could mean absolutely nothing or it could mean that there are people out there that actually have insider knowledge that a market crash is coming. Evaluate the evidence below and decide for yourself...

For some reason, corporate insiders have chosen this moment to unload huge amounts of stock. According to a CNN article, corporate insiders are now selling nine times more of their own shares than they are buying...

Read the rest here: theeconomiccollapseblog.com...

its highly probable that these people know the crash is coming because they are the ones that engineer it. and i'm sure they have done it several times before in order to get even more filthy rich at the expense of others.

For the money challenged like me , can you explain the definition of "something bad",

Originally posted by 12voltz
For the money challenged like me , can you explain the definition of "something bad",

Major stock market collapse leading out to a major economic collapse worse then 2008 in fact it will just be the finishing off of the 2008 collapse as that was just a fore shock.

I just found this is on ZeroHedge.

Blackstone's top-man fears the "oblivious markets" are missing the point that nothing has been solved and that a "big battle between entitlement cuts and raising the debt ceiling" is coming. Shrugging off the anchor's insistence that earnings have been 'pretty good', Wien states reality as expectations are rolling over and performance following. With people complacent and investors euphoric (ignoring European risk re-emergence and depression and Middle East tensions), Wien's brief clip concludes with his expectation of a 200 point correction in the S&P 500 in H1 2013.

To be honest most of this market-speak just confuses me and I don't understand a lot of the terms, but I do know that Blackstone is a serious company and this guy knows what he's talking about. Check out this guys Bio on the site... Byron Wien

reply to post by hawkiye


I would remind everyone how appearing to have "inside knowledge" can be used to make everyone panic and so dump all they are worth. Then the same person making the artificial panic buys it all up.

Happened in England after Napoleon was defeated and they thought he had won......

I don't see the mention of who this person is, so I don't know for sure.
Looking at a 1% risk per trade someone would need 1.1 Billion dollar portfolio in order to place that trade "normally" If the person has a portfolio with a lower value then he/she is either taking a risk or knows something the rest of us don't.

If this is combined with the post about wall street shorting stocks well it stands to reason that they also know something, which may mean something is about to go down.

Need to keep up on this.

The stock market has and always will be a toy for the rich to play with. it doesn't show any real information. the peaks and troughs are created not reacted to. the market starts breaking new ground, growth occurs at a financial level then companies sell out their shares in huge quantities and allow the smaller investors to take a loss as their share value decreases. then the corporation takes the liquid capital created by the selloff and buys back all the shares it sold at the decreased value caused by their selloff. This also provides businesses with quick liquid funding as there is a cash value left over after re-aquisition of shares. this is also a way for companies to their retirement pensions low as many employees these days invest in shares of their employers company or opt into accepting shares as bonuses and retirement benefits. this tactic can keep such costs down in the future.

in my opinion a corporation should not be legally capable of investing in itself through stock shares unless there are regulations that prevent massive selloffs like these.

as it applies to this thread, im guessing someone knows of a company or several that may do this in the next, i guess, 60 days.

is it possible this is one of those algorithms that's buys then immediately sells shares without actual financial transfer just to create share exchanges that make the market look active.

Originally posted by JustMike

The following is my opinion as a member participating in this discussion.

Is 11.25 million dollars such a huge amount in terms of what these traders deal in? I simply don't know what the typical range is for their deals. What qualifies as "small", "average" and "huge"?

Also, could we have some notion of what the trader stands to gain (or lose)? Is this trade leveraged in some way, or is it a straight percentage gain/loss calculated against the 11+ mill?

Finally (and please forgive all my questions!), is there any way for traders to hedge such a deal so that no matter what happens, they don't stand to lose a great deal? I understand the basics of going long or short, but once it gets into things like the VIX, I'm pretty lost!

As an ATS Staff Member, I will not moderate in threads such as this where I have participated as a member.

I am no expert either so maybe someone more knowledgeable can chime in too. Having said that the OP article seems tho think this is a huge risk and is not a likely for any trader to take unless they are VERY confident they will not loose.

As for the VIX (someone correct me if I am wrong) according to what I have read it is basically a measure of the spread of indexes gauging the volatility of S&P 500 index options in the futures market. So when someone is betting that much that it will go way up over 20 at a time when it has been at 5 year lows that is a big indication they know stocks will drop.

reply to post by hawkiye


So technically taking a risk like this in a public manner could cause higher volatility thus assisting in the volatility increase thereby increasing their chances at being correct and making bank with such a bet?

reply to post by hawkiye


Market will crash ??

I'm shocked and bewildered. I thought the "market" is slowly recovering.

I am not stock market savvy so I don't really know what has happened here other than someone made a bet the stock market will crash soon. However, with all the buzz of top level bankers resigning, record withdrawals from US banks and other news, warnings and tons of other rumors floating around coupled with the article in the OP. One can't help to take pause and think something is about to happen and has been planned/known/foreseen for quite awhile now ...

Sorry I didn't read the thread, just the title.

reply to post by Tazkven


What i have gathered from this thread is that this isn't an 11+ million dollar bet that the market will crash, its a bet that sometime in the next two months the volatility of the markets is going to basically skyrocket, primarily the volatility of the s&p 500. This is really not to be unexpected realistically with the debt ceiling debate raging and budget woes mounting. i would expect volatility increases if this is actually what the bet was made for. that being said i wouldn't be caught dead risking that kind of money on anything. the fact anyone or even any company can do that is just a testament to the greed that is bread into our society and the complete ignorance of morality and ethicality that a CIVILIZATION should exhibit.

I'm almost totally ignorant of Markets and their black arts...i know people basically bet on it, and that's as far as my 'trader' knowledge goes.

But one thing to keep in mind...just before 9/11 there were similar unusually high 'put options' placed on the airlines..then the planes hit, and the airline stock fell almost as fast as the 3 towers did.

Originally posted by zedVSzardoz
reply to post by hawkiye

 

I would remind everyone how appearing to have "inside knowledge" can be used to make everyone panic and so dump all they are worth. Then the same person making the artificial panic buys it all up.

Happened in England after Napoleon was defeated and they thought he had won......

Yeah, it was Mr Rothschild himself who did it that time.
That particuler stunt made him filthy rich and to big to fail.

Wasn't this stunt the main theme of the movie 'The taking of Pelham 123'?

John Travolta's character hijacks a subway train, demanding $10 Million ransom...but the real heist was from the markets, where he had placed $10 Million in 'put options' which then turned into over $300 Million because of the hijack and associated fallout.

Curious that it has just been shown on British TV a couple of days ago.