The Conspiracy Trade

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The conspiracy nut jobs are out in force this week and they’re all saying that a “Bin Laden” option’s trade was placed. According one site (they won’t get my link), they claim someone sold 61,730 September SPX Calls at strike 700 because this person or people know that there will be another terror attack on the US before Sept 21 (option’s expiration).

What they fail to tell you is that 61,740 September SPX Puts at strike 1700 were also bought (I assume bought) [via CBOE]. I’m no option’s expert but this looks like some sort of spread that a large institution is using to move money around.

I guess we’ll have to wait till September 21st to see who was right and who was the dumbass.

Related: More Investors Are Betting on Major Selloff in Stocks

  • Christian Gross

    ROTFL…..

    That’s funny…

    Though let’s think about this one. Why would somebody do this? I am not saying this has anything to do with Bin Laden. Though what play are they doing?

    Oh, I think it is not a BinLaden play, but a Bernanke PUT (in the form of a sold call). I think somebody must be REALLY comfortable thinking that Bernanke will not lower the interest rate.

  • http://www.neuralmarkettrends.com Tom

    I was reading somewhere, maybe elitetrader.com, that it was part of a large box spread where some institution is protection itself against interest rate change as it moves large sums of money around.

    I guess it would make sense if you have several billion dollars to move now, right before the Fed Rate decision.

    However, I still have to do the math to convince myself.

    I hope Ben doesn’t change the rate, we have rampant inflation and who cares if the Hedge Funds made stupid bets. Suck it up like the rest of us.

  • Christian Gross

    Ah, ok a box spread. Yes that makes quite a bit more sense.

    >I hope Ben doesn’t change the rate, we have rampant inflation and who cares if the Hedge Funds made stupid bets. Suck it up like the rest of us.

    LOL… Yes I agree completely with you. Today I was listening to Rick Santelli on CNBC (him and Steve Lieseman are my favorites) and Rick said, “We have to many cheap credit junkies.” And that is the point of the argument. The funds calculated using cheap credit and now are getting caught with their pants down. Tough!