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2007-08-31 Home Front Economy

$1 Billion in suspicious stock activity reminiscent of pre-9/11 conditions

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Posted by Claiger Jomomble6619 2007-08-31 05:40|| || Front Page|| [7 views ] Top

#1 Possibly this is risk-covering action by hedge funds (who mostly didn't exist in 01).

Posted by mhw 2007-08-31 08:04|| 2007-08-31 08:04|| Front Page Top

#2 George Soros.

Posted by Excalibur 2007-08-31 09:44|| 2007-08-31 09:44|| Front Page Top

#3 I'd be suspicios if there wasn't suspicious activity in the financial markets...

Posted by tu3031 2007-08-31 09:59|| 2007-08-31 09:59|| Front Page Top

#4 If you are interested, you should track the Standard & Poors Deposit Receipts Trust (symbol: SPY)

http://finance.yahoo.com/q?s=spy

Important note: If you check this link, also see the headline beneath the chart called "Dispelling the 'Bin Laden' Options Trades", which tries to explain this apparently abnormally large PUT option trades.

Posted by Anonymoose 2007-08-31 10:12|| 2007-08-31 10:12|| Front Page Top

#5 I trust we followed the money in 2001 and we have those who placed the put options in jail, no ?

Posted by wxjames 2007-08-31 10:14|| 2007-08-31 10:14|| Front Page Top

#6 This is interesting, but clearly not enough information provided here to get excited about.

Nearly $1 billion of put options have been purchased, basically betting that Standard and Poor's 500 index will fall significantly by the third Friday in September.

How many people have bought them? One? Two? Twenty Thousand? Because that certainly makes a difference as far as terrorism would be concerned.

Jeesh, even I expect the S&P to take a tumble. I'm not an investor, but the S&P has continued to climb since early last year - DESPITE the subprime crunch. People have been predicting a major correction all year long. And though there was one early in the year, it has gone way up since that time, so if it fell 5% it might still be higher than it was at the end of last year. Like I say, I haven't really been following the numbers.

If the billions dumped in by the Fed was not enough - or if it was just sucked into the pockets of saavy investors rather than actually doing anthing long-term to clean up the subprime mess, the I suspect many investors may be betting on a fall.

Posted by Unutle McGurque8861 2007-08-31 10:36|| 2007-08-31 10:36|| Front Page Top

#7
Dan Perper, a Partner at Peak 6, one of the largest option market makers and proprietary trading firms, told me this morning that his firm was the counterparty to a good portion of the volume and position in question. "This was done as a package in which the box spread was used [as a] means of alternative financing at more attractive interest rates" explained Perper.

Simply put, two parties agree to trade the box at a price that essentially splits the difference between current rates.

For example, the rough numbers would be that given the September 700/1700 box must settle at a value of 1,000 -- it is currently trading around 997 -- that translates into a 5% interest rate.

For the seller it is a way to borrow money at a slight discount to the prevailing rate, and for the buyer, it is a way to lend money at a low rate of return, but it's better than nothing at a time when others are scared and have painted themselves into a box (ha ha) because they have run out available funds.

Posted by flash91 2007-08-31 10:40|| 2007-08-31 10:40|| Front Page Top

#8 in jail at least, for those knowledgable of the attacks a very high rooftop skdiving adventure - sans parachute - would be more appropriate, just like the poor people who had the choice of jumping or burning to death on 9/11

Posted by Frank G">Frank G 2007-08-31 10:42|| 2007-08-31 10:42|| Front Page Top

#9 How often have positions like this been taken since 9/11?

Posted by Nimble Spemble 2007-08-31 11:12|| 2007-08-31 11:12|| Front Page Top

#10 That's a triple witching Friday, too -- the last trading hour on the third Friday of March, June, September and December when options and futures on stock indices expire concurrently -- and the markets tend to go a bit crazy then, from what I understand. Hedging would be wise, for the bigger players.

Posted by trailing wife 2007-08-31 11:49|| 2007-08-31 11:49|| Front Page Top

#11 There is no way that a billion dollars worth of options could be purchased because they cannot be covered. These kinds of numbers are tossed around all the time by people who don't understand options pricing. I suggest to you that the figure was arrived at by multiplying the current value of the S&P 500 by the number of puts purchased. This is a total bullshit story.

Posted by Howard Veit">Howard Veit 2007-08-31 12:36|| http://oraculations.blogspot.com]">[http://oraculations.blogspot.com] 2007-08-31 12:36|| Front Page Top

#12 wxjames- these puts were never claimed.
makes you wonder.

Posted by Shung de Medici8708 2007-08-31 14:44|| 2007-08-31 14:44|| Front Page Top

#13 these puts were never claimed.

If truenot only does that make them all the more suspiciousit beggars the question of whether the SEC ever traced exactly who in hell placed them. If they can be tracked back to a single individual or organization whose interests are inimical to America's then Frank's Skyscraper Swan-dive plan starts to sound like a really good idea.

Posted by Zenster">Zenster 2007-08-31 15:20|| 2007-08-31 15:20|| Front Page Top

#14 I wouldn't bet on this story being totally bullshit. Gen. Petreus will report to congress on Sept 11. The donkeys will do everything they can to stop the current war in Iraq. If they manage to get troops pulled from Iraq before we've got the place secure, we'll see an expotential shift in oil prices upward. I think someone (Soros? Lewis?) is betting heavily that the donks will succeed. All it does for me is make me angry that people play these kinds of stupid games, and that hundreds or thousands of small-income investors get burned in the process. George Soros should be hung from the Washington Monument by an elastic rope.

Posted by Old Patriot">Old Patriot 2007-08-31 15:40|| http://oldpatriot.blogspot.com/]">[http://oldpatriot.blogspot.com/] 2007-08-31 15:40|| Front Page Top

#15 I could live with Mr. Soros throwing away another chunk of money. Even Senator Reid is starting to back away from his "Pull out now!!!" position, so I don't see his coterie fighting hard to make themselves known as hopeless on foreign affairs after all the good news already flowing out even before General Patraeus reports.

Posted by trailing wife 2007-08-31 16:44|| 2007-08-31 16:44|| Front Page Top

#16 Here is a reference:
http://www.9-11commission.gov/hearings/hearing1/witness_kleinberg.htm

Posted by Shung de Medici8708 2007-08-31 16:48|| 2007-08-31 16:48|| Front Page Top

#17 And also, this is the first time 9/11 has fallen on a Tuesday since that "other" 9/11

Posted by BigEd 2007-08-31 18:04|| 2007-08-31 18:04|| Front Page Top

#18 Al-Qaeda terror upended election results in Spain. Market analysts have likely been advising clients of a possible similar move. Some highly specialized market report agencies - especially those related to the petroleum industry - charge thousands of dollars for single report dossiers. Of course, these are not available to the general public. That is not to say that current market anomolies are based purely on speculation. But that could be the case, thus I am holding onto my stocks.

I have heard bits and pieces of short-sell activity connected to 9-11. The public should have received full accounting for same. I know of a cruise line that was hammered with short-selling after 9-11. Without naming names, that was NOT an anomoly; persons connected to a certain tiny, Mid East government were in a position to know of the impending terror, and they were never called to account for the tens of millions in profits that they earned.

Posted by Ulomoth Squank7617 2007-08-31 18:57|| 2007-08-31 18:57|| Front Page Top

#19 persons connected to a certain tiny, Mid East government were in a position to know of the impending terror, and they were never called to account for the tens of millions in profits that they earned.

Yet another of the manifold benefits resulting from our politicians being bought and sold by Middle East petro-dollars.

Posted by Zenster">Zenster 2007-08-31 19:42|| 2007-08-31 19:42|| Front Page Top

23:42 Zenster
23:33 Frank G
23:29 Pappy
23:21 Rambler
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22:22 JosephMendiola
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21:54 Redneck Jim
21:32 Zenster
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21:27 Zenster
21:25 trailing wife
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21:01 trailing wife
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20:56 mrp
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20:40 trailing wife