Mystery Trader Places $1B Worth Of Put Options Suggesting New 9/11 Style Catastrophe

http://www.prisonplanet.com/articles...rket_crash.htm

Market Crash Forecast Suggests New 9/11Mystery trader bets on huge downturn that could only be preceded by catastrophe

Paul Joseph Watson
Prison Planet
Monday, August 27, 2007

A mystery trader risks losing around $1 billion dollars after placing 245,000 put options on the Dow Jones Eurostoxx 50 index, leading many analysts to speculate that a stock market crash preceded by a new 9/11 style catastrophe could take place within the next month.

The anonymous trader only stands to make money if the market crashes by a third to a half before September 21st, which is when the put options expire. A put option is a financial contract between two parties, the buyer and the writer (seller) of the option, in which the buyer stands to benefit only if the price of the asset falls.

"The 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," reports financial blogger Marc Parent. Dow Jones Financial News first reported on the story.

The trader stands to make around $2 billion from their investment should an event trigger a market crash before the third week in September.

Such a cataclysmic jolt could only happen as a result of two factors, China dumping its vast dollar reserves in reaction to the sub-prime mortgage collapse, which it has threatened to do, or a massive terror attack on the same scale or larger than 9/11.

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9/11 itself was foreshadowed by unprecedented put options that were placed on United and American Airlines. Though the Securities and Exchange Commission refused to reveal who placed the options, private researchers traced the investments back to the Deutsche Bank owned Banker’s Trust, which was formerly headed by then Executive Director of the CIA, Buzzy Krongard.

Put options on Morgan Stanley and Merrill Lynch, two of the World Trade Center's most prominent occupants, also spiked in the days before 9/11.

News of the suspicious trades is dovetailed by the comments of Former US Treasury secretary Larry Summers yesterday, who told ABC News that the risk of a recession in the U.S. was greater that at any time since 9/11.

How can thyey do that anonymously? If I go take 1 dollar more than ten grand out of the bank, the feds are notified. So how is it this person or entity can do this? At least we are cognizant of it this time. They wont be getting away with SHIT this time.

I don't know if a Currency Transaction Report (CTR) applies to stock trades.

I asked my father...

Jon: Question about stocks... Does a "Currency Transaction Report" apply to stock trades? Meaning if you make purchases of a stock over $10k, do you have to file with the Government?

Jon's Father: You don't need the report if the money was sitting at the brokers. You should need it if you brought in 10k cash.

Jon: Meaning if the $10k was already in the hands of the mutual fund company, or brokerage, you don't have to. Only if you insert a new $10k in, correct?

Jon's Father: Correct.

Jon: Thank you.

Jon's Father: Cash, a check is different.

Jon: What is the policy for a check?

Jon's Father: There probably is none, because the money would show in the checking account.

Jon: Ok.

Wow that was quick... Do you trust your source?

Quote:

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Originally Posted by AuGmENTor

Wow that was quick... Do you trust your source?

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"Jon's Father" in regards to stocks? You bet your ass. Money is one of his three favorite things. Family. Friends. Money.

Someone in the comments section at C & L is saying they saw a story somewhere about $4.5B worth of put options be bought.

More Investors Are Betting On Major Selloff in Stocks

http://www.cnbc.com/id/20461003

By Jim Kingsland | 27 Aug 2007 | 03:42 PM ET

Not everyone on Wall Street is convinced that the worst is over.

In fact, some investors are betting tens of millions of dollars that the market is headed for a selloff--a major selloff.

The reason: worries about a worsening credit crunch, along with speculation that the Federal Reserve may defy expectations and hold off on cutting interest rates at its Sept. 18 meeting.

So far, over $500 million in in so-called put options have been purchased betting that the benchmark Standard and Poor's 500 index S&P 500 INDEX .SPX [.SPX 1466.79 -12.58 (-0.85%) ] will tumble anywhere from 5% to 11% in September. Some investors are even buying put options calling for 52% decline. A "put" option increases in value as the underlying stock or index falls.

To put it in perspective, a 5% drop in the Dow Jones Industrial Average would be the equivalent of 667 points. An 11% decline would equal 1,468 points. And a 52% drop? You don't even want to know.

The upshot is that some major investors are putting up big money that the market is facing a major decline.

"There is still fear and investors are buying crash protection," says Todd Salamone, senior vice president of research at Schaeffer's Investment Research.

Of course, there are always investors betting on big declines--they're called bears. What's unusual is the amount of money being put up on such a doomsday scenario.

"The activity in those puts has been a lot more aggressive then we have seen in the past," said Bill Lefkowitz, options strategist at brokerage firm Finance Investments. "Part of it is the environment and volatility where the Dow Industrials can easily swing over a hundred points during the day, or session to session."

Salamone of Schaeffer's points out that the index options have been "put dominated over the last several months." And the bets may have as much to do with hedging portfolios--basically an insurance policy you hope you don't need--as much as outright speculation.

"We don't know who the end users of these options are and often they are specialists, pros looking at arbitrage plays, so the common man doesn't necessarily need to be concerned," adds Andrew Wilkinson, a senior market analyst at Interactive Brokers. "But it’s a legitimate build of people wanting protection against the next 10% down should it come."

Whatever the reason, Lefkowitz says worries about what the Fed will do about interest rates are spurring big investors to buy protection in case of a major market drop.

"If the Fed doesn't cut Fed funds, the options market is telling you that the overall stock market will come down hard," says Lefkowitz. "We could be quickly under the 1400 level of the S&P 500 if the Fed doesn't act."

Fed-fund futures and a variety of market pundits have been forecasting a 100% likelihood the Fed will lower the benchmark lending rate, now at 5.25%, meaning there's no room in the market from the Fed for a surprise.

Lefkowitz also says the activity isn't strictly driven by money managers looking to protect portfolios. The put options are tempting enough for speculators to jump in. He says even if the market doesn't fall to below S&P 1400, the put options could still easily rise in value by "20, 30, 40 percent if we saw another large down day."

Seems like it's a trend.

This may fit wih the something big in 90 days theory...

Remember... the 90 days theory is 2 years old.