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I don’t know so I will ask: Is http://www.homelandsecurityus.com a news source? I don’t see any link from them to any news organization. So should we trust what they are saying at face value?
bnelson44 on August 30, 2007 at 10:46 PM
They are somewhat reliable IMO. In this case finding the number of open option contracts and recent volume isn’t that difficult. I know the put/call ratio has risen sharply lately. I don’t use them much, but they are worth a look on a slow day.
Thanks, were you able to independently verify the $1B number?
bnelson44 on August 30, 2007 at 11:04 PM
I wish I had that much time on my hands. What I meant was it can be done with some work and some contacts (option market makers/floor traders/hedge funds)
In my post I also raised the question of the big firms (Goldman, Morgan, Merrill) hedging the market due to recent volatility. But 1 bill is still a dumpload of new contracts.
On Monday when I get to work I’m going to check open put interest on a few stocks and indexes.
Fascinating. I don’t know if you covered this in the rest of the article, but are there identifiable companies or sectors, as in the case of the airlines pre-9/11, highly represented?
mikeyboss on August 30, 2007 at 11:26 PM
Weasel Zipper on August 30, 2007 at 11:02 PM
The second post is beyond me. If it’s true this isn’t anything to be concerned about, what would explain the need to use these complicated transactions right now? Wouldn’t it be more common is they were unremarkable?
What kind of transparency is there in the futures markets? Do we know who’s involved in these transactions?
TheBigOldDog on August 30, 2007 at 11:49 PM
Here is another good article on these trades from TheStreet.com
Some of the theories hold weight, some don’t. The boxed-spread idea is the dumbest one of them all. No way you would lay down all that cash for 63,000 SPX options to make a piddly 5%.
That’s the post I was referring to above. It seems to me if these transactions were unremarkable they would be more common and therefore not be raising eyebrows now. No?
TheBigOldDog on August 31, 2007 at 12:03 AM
Some of the theories hold weight, some don’t. The boxed-spread idea is the dumbest one of them all. No way you would lay down all that cash for 63,000 SPX options to make a piddly 5%.
Depends on the risk, doesn’t it?
bnelson44 on August 31, 2007 at 12:18 AM
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. A large number of these options have also been purchased calling for 50% decline by September 21, 2007.
I saw a similar story this morning but I can not find it now. It had one person doing all that “put option” buying.
MB4 on August 31, 2007 at 1:15 AM
Who knows what and how do they know? You might ask Friend-of-Bill-Barack George Soros. He made a billion or so shorting the British pound.
Bottom line, it is extremely unlikely that this has anything at all to do with “another 9/11″.
MB4 on August 31, 2007 at 3:15 AM
Who knows what and how do they know? You might ask Friend-of-Bill-Barack George Soros. He made a billion or so shorting the British pound.
eeyore on August 31, 2007 at 1:26 AM
Wait a second…I thought you shorted as a way of betting the value would drop. The British pound’s been steadily increasing in value over the past 5-6 years, hasn’t it?
though you’re right…i’m pretty sure soros made all that money WAY before 5-6 years ago
ernesto on August 31, 2007 at 9:17 AM
Hmmm… I’m glad I’m sitting on the sidelines right now. In the old day I might have called Lind Waldock and rode with the big money… but I’m too risk adverse these day. I’ll just sit on the side and let the smoke clear.
Maxx on August 31, 2007 at 10:06 AM
Why do my fingers refuse to put the “s” at the end of my plurals?
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Registration is currently closed. That means if you're not already registered, you can't comment. We will let you know if and when registration re-opens. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
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I don’t know so I will ask: Is http://www.homelandsecurityus.com a news source? I don’t see any link from them to any news organization. So should we trust what they are saying at face value?
bnelson44 on August 30, 2007 at 10:46 PM
They are somewhat reliable IMO. In this case finding the number of open option contracts and recent volume isn’t that difficult. I know the put/call ratio has risen sharply lately. I don’t use them much, but they are worth a look on a slow day.
Weasel Zipper on August 30, 2007 at 11:02 PM
WZ,
Thanks, were you able to independently verify the $1B number?
bnelson44 on August 30, 2007 at 11:04 PM
I wish I had that much time on my hands. What I meant was it can be done with some work and some contacts (option market makers/floor traders/hedge funds)
In my post I also raised the question of the big firms (Goldman, Morgan, Merrill) hedging the market due to recent volatility. But 1 bill is still a dumpload of new contracts.
On Monday when I get to work I’m going to check open put interest on a few stocks and indexes.
Weasel Zipper on August 30, 2007 at 11:14 PM
Fascinating. I don’t know if you covered this in the rest of the article, but are there identifiable companies or sectors, as in the case of the airlines pre-9/11, highly represented?
mikeyboss on August 30, 2007 at 11:26 PM
The second post is beyond me. If it’s true this isn’t anything to be concerned about, what would explain the need to use these complicated transactions right now? Wouldn’t it be more common is they were unremarkable?
What kind of transparency is there in the futures markets? Do we know who’s involved in these transactions?
TheBigOldDog on August 30, 2007 at 11:49 PM
Here is another good article on these trades from TheStreet.com
Some of the theories hold weight, some don’t. The boxed-spread idea is the dumbest one of them all. No way you would lay down all that cash for 63,000 SPX options to make a piddly 5%.
http://www.thestreet.com/pf/newsanalysis/optionsfutures/10377063.html
Weasel Zipper on August 31, 2007 at 12:00 AM
That’s the post I was referring to above. It seems to me if these transactions were unremarkable they would be more common and therefore not be raising eyebrows now. No?
TheBigOldDog on August 31, 2007 at 12:03 AM
Depends on the risk, doesn’t it?
bnelson44 on August 31, 2007 at 12:18 AM
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. A large number of these options have also been purchased calling for 50% decline by September 21, 2007.
I saw a similar story this morning but I can not find it now. It had one person doing all that “put option” buying.
MB4 on August 31, 2007 at 1:15 AM
Who knows what and how do they know? You might ask Friend-of-
Bill-Barack George Soros. He made a billion or so shorting the British pound.eeyore on August 31, 2007 at 1:26 AM
This $900 Million Bet Has Global Traders Talking…
MB4 on August 31, 2007 at 2:56 AM
Bottom line, it is extremely unlikely that this has anything at all to do with “another 9/11″.
MB4 on August 31, 2007 at 3:15 AM
Wait a second…I thought you shorted as a way of betting the value would drop. The British pound’s been steadily increasing in value over the past 5-6 years, hasn’t it?
flipflop on August 31, 2007 at 6:39 AM
though you’re right…i’m pretty sure soros made all that money WAY before 5-6 years ago
ernesto on August 31, 2007 at 9:17 AM
Hmmm… I’m glad I’m sitting on the sidelines right now. In the old day I might have called Lind Waldock and rode with the big money… but I’m too risk adverse these day. I’ll just sit on the side and let the smoke clear.
Maxx on August 31, 2007 at 10:06 AM
Why do my fingers refuse to put the “s” at the end of my plurals?
Maxx on August 31, 2007 at 10:11 AM