Friday, August 31, 2007

UPDATED AND BUMPED: Is Something Big In The Works?

Phew!

Apparently, this story has been debunked. That is good freaking news. Check it out (UPDATE ALL IN ORANGE):


UPDATE: Dispelling the Bin Laden Options Trades (hat tip David)

The blogosphere and options trading desks have been rife with speculation about these trades, which are unusually large bets that the market will make a huge move in the next month. Some entity, or entities, has taken a large position on extremely deep in the money S&P 500 options, both puts and calls, that won't pay off unless the market undergoes an extremely large price move between now and the options' expiration on Sept. 21.

However, Dan Perper, a Partner at Peak 6, one of the largest option market makers and proprietary trading firms, has confirmed that the trades are part of a "box-spread trade."
"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.


From Pamela, at Atlas Shrugs:


Can't ignore this. Laid out all the signs here. And you notice there has been no mention, no follow up of this?

$1 Billion in Risky Stock Market Transactions Similar to Pre-9/11 Activity...


In the weeks preceding the 2001 attacks on America, there were very
significant financial warning signs that something big – and bad – could be
about to happen. Huge surges in purchases of “put options” on stocks of United
Airlines and American Airlines, the two airlines used in the attacks, and “put
options” on Merrill Lynch & Co., and Morgan Stanley, stocks of two financial
services companies hurt by the attack were noted. Put options are essentially
“bets” that a stock or stock index will drop on or before a certain date; the
larger the drop, the bigger the gain for the purchaser of the option.

Fast forward to the present day, and we have the same type of trading
that took place in the days that preceded the 9/11 attacks – but on a larger
scale. 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. For example, a 5% drop in the Dow Jones
Industrial Average would be the current equivalent of about 670 points. A
decline of 11% would equal about 1,470 points in today’s market. Obviously,
larger drops, such as a 50% decline, would cause an unprecedented market
collapse. Money would be made for the purchaser(s) of the put options – but the
same purchaser(s) stand to lose over $1 BILLION in the investment if the market
remains relatively static through September 21, 2007.


UPDATE: Syn notes in the comment section:


Bill Roggio noted recently that many of the Islamist training camps now located
in Warzistan have all but emptied out, much like what was observed when Islamist
training camps were emptied out a month before 9/11/2001

A 50% drop in the Stock Market?!?

What kind of event would cause that, pray tell?

Isn't this just such a fun blog to read?

Have a nice day, everybody.




9 comments:

Epaminondas said...

The question to ask is what list of things would cause a 50% drop in the american stock market??

If that happened, and it was the result of an act by others, what would the result be somewhere else?

USA becomes the largest member of OPEC, i.e the only one?

Mecca = fine glass product

Pakistan, Waziristan and Afghanistan become the home of only fies and cockroaches?

We leave the ME entirely and concentrate on building log cabins in suburban San Antonio for the open border immigrants?

Anonymous said...

Pastorius this story gives me the creeps... You'd think, nay hope, that the intelligence services are already on to this and tracing who's placing these bets.

Anonymous said...

Over here we have an anti-terrorism hotline.. Maybe one of you guys should ring the US equivalent? Seriously!

Epaminondas said...

There are 'explanations' but u know, they just don't give me that good feeling

Pastorius said...

Hi Epa,
The link you provided does not work, unfortunately.

Pastorius said...

Jonz,
It hadn't even occurred to me that the FBI wouldn't be aware of this.

However, that is a stupid assumption on my part, isn't it?

Anonymous said...

Despite the "clarification" - I do not get the warm fuzzies. Those two bozos caught at Goose Creek SC last month have been identified as having a record of terrorism in Egypt.

And them wasn't "firecrackers" in their trunk neither.

• Al Qaeda camps emptied out

• 2 unknown M.E. Men on a ferry in Seattle being sought by the FBI

* The Goose Creek Lost Boys

• Huge options trades betting on a 50% stock decline in a few weeks.


Nope.

Not sleeping well these nights.

Epaminondas said...

TRY THIS LINK

Always On Watch said...

I happen to believe that the market is going to tank, but I'm not sure that I think the cause will be terrorist activity. Could be, of course, but some of the big players in the market have been jockeying for several months now. Plus, the mortgage industry is in severe straits, with Fed Reserve dollars having already been infused to prop up the market.

I say the above without being terribly market savvy. Also, AQ does wage financial jihad. OBL has often referred to taking down the American economy.

I remain convinced that something weird is going on in NYC and in NJ. Pamela has followed those stories, of course, and that one video with the news reporter is particularly disturbing.