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Remember that big bet on the VIX?

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posted on Feb, 21 2013 @ 12:47 PM
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posted on Feb, 21 2013 @ 12:49 PM
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reply to post by leo123
 


some insider is well on his way
edit on 21-2-2013 by Gwampo because: (no reason given)



posted on Feb, 21 2013 @ 12:50 PM
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reply to post by leo123
 


I see a graph....Care to explain WTH you are talking about for us who have no clue?

Maybe just a couple words would work.....



posted on Feb, 21 2013 @ 12:54 PM
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I thought the person shorted the position meaning in order to profit it had to go way down within the next 90days. Am I missing something?



posted on Feb, 21 2013 @ 12:56 PM
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Somebody (a person not an institution) bet 11 million on a 60 day VIX contract with a strike price of 20 a short while ago.

The Vix if the volatility index and while it can rise with big moves in the market either up or down, it more often spikes with big down moves in the market.

If the Vix doesn't go above 20 before the contract expires, all is lost.

Here is a link to the original article.

www.businessinsider.com...

"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."

edit on 21-2-2013 by leo123 because: (no reason given)



posted on Feb, 21 2013 @ 01:09 PM
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So say the VIX spikes does this guy just make a crap load of money and make out like a king because he had prior knowledge. What does this mean for the average joe like me who hasen't that sort of money but have heavily invested in physical metals well there value bottom out. Is the market going to spike, crash, excell, what in laymans terms does this me for me average joe office worker, doing 9 - 5 to get bye????

SaneThinking



posted on Feb, 21 2013 @ 01:11 PM
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It was a safe bet. The market has been unreasonably high, and it was only a matter of time before the rug was pulled out The market is now falling and, as a consequence, the VIX will go up.

What comes up, must come down, and vice versa. The VIX can be very volatile, but anybody can see the writing on the wall: We're going down. They can only massage and manipulate the stocks and the numbers for so long before the bubble bursts.

With the announcement of several members of the fed yesterday afternoon saying that they don't really want to do quantitative easing any more (which was pumping up the market), it was pretty obvious the VIX would run up today.



posted on Feb, 21 2013 @ 01:12 PM
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reply to post by leo123
 


If you have inside info that a stock will be worth a lot in the future can you make a vix bet and then just buy up a ton of stock after a huge sale, to make the volatility fufill said bet? And then sell the stock right after making HUGE gains?

Or is that supposed to be illegal?


@above post.. Oh, that actually makes even more sense.. Uh oh..
edit on 2/21/2013 by Dustytoad because: (no reason given)



posted on Feb, 21 2013 @ 01:16 PM
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Insider trading is obviously illegal, that's why all those put options bought on the airlines just prior to 911 were so thoroughly investigated, although I don't believe anybody was actually prosecuted.



posted on Feb, 21 2013 @ 01:32 PM
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reply to post by leo123
 


I wasn't actually asking, but you did illustrate my point nicely.

Thank you.



posted on Feb, 21 2013 @ 02:10 PM
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reply to post by Dustytoad
 


I would like to know who Mr. 11 Million is!

It would be obvious that he or she is just the poster child of the short or is it stop??? And is VIX the name of the hedgefund.



posted on Feb, 21 2013 @ 02:15 PM
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Today the VIX is up 1.04 to 15.72, or +7.08%

Conversely the one stock I own is down 11% today



posted on Feb, 22 2013 @ 11:27 AM
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He doesn`t have to hit the 20 strike to be In The Money. What the trader did was buy way OTM (out of the money) Call options.

Options this far away from strike are dirt cheap, as they often expire worthless. So, for example, lets say if they meet the strike price of 20 in the VIX, these options will be worth 100 each. There is a model for pricing the time value of OTM options, but I won`t get into it here...but lets just say for argument that these options would price at about 5 bucks, being so far out of the money.

Today, VIX is at about 16 or so, and it looks like volatility is picking up...hitting 20 is almost a sure thing.
So those options that the trader bought for 5, are likely worth around 60 today. Not a bad return, huh




posted on Feb, 22 2013 @ 10:30 PM
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Originally posted by FissionSurplus
It was a safe bet. The market has been unreasonably high, and it was only a matter of time before the rug was pulled out The market is now falling and, as a consequence, the VIX will go up.

Sure, as long as you are not betting on a specific timeframe. However the moment you bet on a specific timeframe, sixty days in this case, and huge variation it is no longer a safe bet. Precisely the reason why it drew anyone's attention at all.

It could have been someone with insider information, but more likely someone who had a lot of money and these kinds of bets are not significant for him/her.



posted on Feb, 23 2013 @ 01:19 AM
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Question remains, why was such a huge bet made.



posted on Feb, 23 2013 @ 01:35 AM
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Originally posted by leo123
Question remains, why was such a huge bet made.


Because... itz coming.

There will be no sequestration deal. The cuts will be made. This is by design. There was never any anticipation that a deal would be made. This way there will be cuts and the dems and the reps can blame each other and point fingers.

This will further contract the economy.

So get ready. Starting next Thursday, it's going to get very bumpy. And get worse as time goes by.

And stay away from the Mexican border.



posted on Feb, 23 2013 @ 01:42 AM
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Have to remember it wasn't just this trader there were several others too... www.abovetopsecret.com... From the original thread on this



posted on Feb, 23 2013 @ 01:51 AM
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What if it's a prearranged signal to the people in the know...such a large, unusual move & then it actually hits?



posted on Feb, 23 2013 @ 09:10 AM
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reply to post by leo123
 


hi leo....cause it's almost the japanese fiscal quarter/ year....and they have a new appointment for the leader coming.....the jpy pairs all shot like a rocket after the secret I can't post.....and then they stagnate to shake out the longs.....and now here comes the appointment....which will drop the jpy pairs temporarily, till the new appointee gives his speech, then bash boom....to the moon, as he will have to follow the guidelines to follow the 2% inflation strategy.



posted on Feb, 23 2013 @ 12:39 PM
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Two words and a link: very academic. I'm not going to read it!

I love the cat though.
edit on 23-2-2013 by Alien44 because: Added text.





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