August
28th 2007
Anybody have a clue as to what these
'investors' are expecting?
The
two sales are being referred to by market traders as
"bin Laden trades" because only an event on the scale of
9-11 could make these short-sell options valuable.
There are 65,000 contracts @ $750.00 for
the SPX 700 calls for open interest. That controls 6.5
million shares at $750 = $4.5 Billion. Not a single
trade. But quite a bit of dollars on a contract that is
700 points away from current value. No one would buy
that deep "in the money" calls. No reason to. So if they
were sold, it looks like someone betting on massive
dislocation. Lots of very strange option activity that I
haven't seen before.
The entity or individual offering these
sales can only make money if the market drops 30%-50%
within the next four weeks. If the market does not drop,
the entity or individual involved stands to lose over $1
billion just for engaging in these contracts.
Clearly, someone knows something big is
going to happen BEFORE the options expire on Sept. 21.
THEORIES:
The following theories are being
discussed widely within the stock and options markets
today regarding the enormous and very unusual activity
reported above and two stories below. Those theories
are:
1) A massive terrorist attack is going to
take place before Sept. 21 to tank the markets, OR;
2) China, reeling over losing $10 Billion
in bad loans to the sub-prime mortgage collapse
presently taking place, is going to dump US currency and
tank all of Capitalism with a Communist financial
revolution. Either scenario is bad and the clock is
ticking. The drop-dead date of these contracts is
September 21. Whatever is going to happen MUST take
place between now and then or the folks involved in
these contracts will lose over $1 billion for having
engaged in this activity.
"$1.78 Billion Bet that Stock Markets
will crash by third week in September Anonymous Stock
Trader Sells 10K Contracts on EVERY S&P/Y "Strike"
Shorts Stocks "in the money" effectively selling all his
SPY holdings for cash up front without pressuring the
market downward.
This is an enormous and dangerous stock
option activity. If it goes right, the guy makes about
$2 Billion. If he's wrong, his out of pocket costs for
buying these options will exceed $700 Million!!! The
entity who sold these contracts can only make money if
the stock market totally crashes by the third week in
September.
Bear in mind that the last time anyone
conducted such large and unusual stock option trades
(like this one) was in the weeks before the attacks of
September 11. Back then, they bought huge numbers of
PUTS on airline stocks in the same airlines whose planes
were involved in the September 11 attacks.
Despite knowing who made these trades,
the Securities and Exchange Commission NEVER revealed
who made the unusual trades and no one was ever publicly
identified as being responsible for the trades which
made upwards of $50 million when the attacks happened.
The fact that this latest activity by a
single entity gambles on a complete collapse of the
entire market by the third week in September, seems to
indicate someone knows something really huge is in the
works and they intend to profit almost $2 Billion within
the next four weeks from whatever happens! This is
really worrisome."
