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SPX Puts Signal Another Terrorist Attack? Chinese dumping of $?


I found this link in my travels today (sorry forget where), but I found it absolutely fascinating.  Many already know about the massive amount of option activity betting heavily against the US markets before 9/11, but did you know there is a significant amount (over $1 billion) betting on a 50% drop in the S&P by options expiration next month?  I am seeing nearly 50,000 puts and calls for next month at the 700 strike price (S&P is currently at 1,466.79).   Here is an interesting article on this and I am wondering if anyone has a rational explanation that they could share, shoot me an email if so.



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This entry was posted on Monday, August 27th, 2007 at 7:24 pm and is filed under Potpourri. You can subscribe via RSS 2.0 feed to this post's comments. Responses are currently closed, but you can trackback from your own site.

2 Comments on “SPX Puts Signal Another Terrorist Attack? Chinese dumping of $?”

  1. Aaron Says:
    August 30th, 2007 at 12:33 pm

    I certainly do not have a rational explanation for this article at all. I am skeptical of the predictive nature of these options though. This is interesting, but it doesn’t make much sense to me.

  2. fivestocks Says:
    September 3rd, 2007 at 11:19 am

    Larry J wrote: “Barron’s says that the bin Laden trade is a “box-spread trade” and Daily Options Report (http://adamsoptions.blogspot.com/) even identifies one of the counterparties. I read elsewhere that this happened last year, too.”