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

Marshal law, forced gun removal/control and draft. This is if the market crashes. Just a wild guess.

One sentence version of my post: it's almost certainly just a little Armageddon insurance on a much bigger deal.

You might think 11 million is a lot of money, but most likely this sort of trade exists entirely as a 'just in case' thing to balance the risk on something much larger, and they made that bet expecting to and PREFERRING to lose it all.

If you were making a deal worth hundreds of millions or even a multi-billion dollar deal, and you knew it was going to be the single most important financial deal in your life, wouldn't you be comfortable throwing away 11 million dollars if it meant that you were going to save a lot of money in the event total financial Armageddon happened just when your multi-billion dollar deal was going down?

Traders call events like that 'black swans' and there is actually a very small, elite club of investors who literally do nothing but lose money on purpose for a living because they specialize in funds that exist entirely for this purpose. They lose money all the time because they specialize in offering people a way to balance out the risk of these large, unforeseeable events happening at the worst possible time for them.

A good example of the sort of deal you'd want to use this sort of thing for is one where you are finally selling the company you have spent decades building up and you are going to sell it for a massive windfall of hundreds of millions.

What if the market crashed on the day you were going to make say 400 million dollars from selling your company, everything you worked for for 30 years? Say you'd be all but wiped out and make only 1 or 2 million dollars while incurring debts of 50 million and you'd be bankrupt and isn't that a bummer?

So as part of the deal, you bet 11 million on a total market crash and you stand to win 333 million on that bet if the crash actually happens. So if it doesn't happen, you make 389 million dollars, and if it does, you make 333 million instead of going bankrupt.

en.wikipedia.org...

reply to post by hawkiye


Something bad is gonna happen alright.

That trader is gonna lose all that dough.

Then they're gonna go nuts on everybody.

I wouldn't read too much in to it. $11 million is chump change to many.

articles.latimes.com...

If there were more than ten people doing likewise I might take notice.

reply to post by Zarniwoop


When company insiders start selling its usually a sign that the people with the most knowledge feel Ike they've reached a top. It's a pretty good indicator to start selling.

If there is a sudden "stock market crash" take my advice and buy as much as you can, because in another few years it will be right back up to where it is now. That's how the scam works.

How do you do a call spread with puts? long or short puts, no fortune will be made even if vix went to the moon

Originally posted by avatar01
If there is a sudden "stock market crash" take my advice and buy as much as you can, because in another few years it will be right back up to where it is now. That's how the scam works.

I've got one word for you my friend, Inflation. Try and buy as much as you can when your money is worth half the original value makes sense? The extra money anybody has will be going on fuel and food! And if anybody can afford to 'buy' anything it should be GOLD as once the game is over the new currency will be backed by gold not paper!

reply to post by JustMike

This is a huge bet because it is a derivatives bet--an option call, if I read this correctly. These trade for pennies on the actual value, but because they are margin calls, one has to have the equivalent amount of wealth in one's account to cover if the trade goes sour. And by that I don't mean just the amount of the call, but the potential market downside of the trade itself, which could be exponentially higher.

So has anything come from this so far?

reply to post by hawkiye


[color=turquoise]Wanted to give this post a nudge as it has been 60 days or so and the VIX is at 12ish. The Dow Jones Industrial is at around 14,800 and setting new highs almost daily.

Curious as to how the 11 million dollar bet is looking now?

Then again, there are probably some unknown financial factors that have yet to play themselves out.

anyone willing to bet this is a psyop, where this big VIX bet was made to go public as they knew many people would watch. The bet then loses giving many people even more confidence in the market (it's already setting record highs). So people start investing even more money in the market, then the crash comes and even more people get hurt than would have been if this bet wasn't placed & heavily circulated publicly

[color=sky blue] In light of the Boston Marathon bombing as well as the initial tank of precious metals and the stock market, VIX is now at 17.27. Maybe this 11 million bet is going to pay off?

can someone give a laments recap of the investment for those stock challenged as myself.

1. What was the investment?
2. What has to occur for a payout?
3. When was the deadline?
4. Will the Boston Marathon Explosions cause enough of a ripple in the market for the investor to win?
5. Anyone know who or what group did the investment?

Originally posted by Wildmanimal
reply to post by hawkiye

 

Something bad is gonna happen alright.

That trader is gonna lose all that dough.

Then they're gonna go nuts on everybody.

you were saying?
did the trader pig lose all his money or did he become richer with inside knowledge of Boston?

reply to post by Thunderheart


Sounds like a ploy to get people to buy shares. Imagine the result of that story with Bill gates' name in the headline. Wait a minute, isn't that being advertised in the ads section on ATS?(What is BG's favourite stock to invest in?) Mmmm.......

interesting timing eh? anyone digging into this?