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.
– Full Article –
It figures someone bets on this kind of thing. Morbid as trading on catastropy sounds, It makes sense.