Two examples of just today: DJ (look to pic below) Look at that call volume. Suspicious? Didn't bother to check if it was on the bid or ask, so if anyone felt like it, please do. But the IV uptick implies it was probably on the ask. And... 9:58: CHATTER ABOUT A HIGHER ISM MANUFACTURING MAKING THE DEALING DESK ROUNDS - Rumor of 55+ reading hitting the interbank desks v 51.0e 10:00: *APR ISM MANUFACTURING: 54.7 V 51.0E; PRICES PAID: 73.0 V 67.8E - New Orders: 58.5 v 51.6 last - Employment: 53.1 v 48.7 last
So the only investors who should have profited from the announcement were those who owned DJ stock by mere accident?
Headfake rally if I've ever seen one. But what, and yes - I mean this literally - do I know? Benjamin Graham taught me better than to believe that any prediction other than the markets will 'fluctuate,' is just as likely to be right than wrong. I still can't overcome my negative feelings about the U.S. economy, however.
I really don't understand why these insiders buy such massive blocks of options, don't they realize that the FIRST thing the sec looks at is suspicious option activity.
When was the last time the SEC busted somebody for insider trading in options? Hell, AFAIK they can't even find the people that bought all those airline puts before 9-11. Paris Hilton's neutered lap dog has more bite than the SEC at this point. Wasn't there a lawyer there that recently got the ax because he was working a case against John Mack and the case was subsequently and miraculously dropped?
Exactly. The SEC is in bed with Wall Street. It's staffed by many 'revolving door' opportunity seekers who work there for a while as an entry to much more money in the very industry they are allege to 'regulate.' I'm not saying there are no fine and upstanding people at the SEC, but as to many, paint me completely cynical.
http://www.gpoaccess.gov/911/pdf/fullreport.pdf 130. Highly publicized allegations of insider trading in advance of 9/11 generally rest on reports of unusual pre-9/11 trading activity in companies whose stock plummeted after the attacks. Some unusual trading did in fact occur, but each such trade proved to have an innocuous explanation. For example, the volume of put optionsâ investments that pay off only when a stock drops in priceâsurged in the parent companies of United Airlines on September 6 and American Airlines on September 10âhighly suspicious trading on its face.Yet, further investigation has revealed that the trading had no connection with 9/11.A single U.S.-based institutional investor with no conceivable ties to al Qaeda purchased 95 percent of the UAL puts on September 6 as part of a trading strategy that also included buying 115,000 shares of American on September 10. Similarly,much of the seemingly suspicious trading in American on September 10 was traced to a specific U.S.-based options trading newsletter, faxed to its subscribers on Sunday, September 9, which recommended these trades.These examples typify the evidence examined by the investigation.The SEC and the FBI, aided by other agencies and the securities industry, devoted enormous resources to investigating this issue, including securing the cooperation of many foreign governments.These investigators have found that the apparently suspicious consistently proved innocuous. Joseph Cella interview (Sept. 16, 2003; May 7, 2004; May 10â11, 2004); FBI briefing (Aug. 15, 2003); SEC memo, Division of Enforcement to SEC Chair and Commissioners,âPre-September 11, 2001 Trading Review,â May 15, 2002; Ken Breen interview (Apr. 23, 2004); Ed G. interview (Feb. 3, 2004)
I worked on hundreds of insider options cases when I worked for one of the exchanges. Every year, thousands of people are investigated, fined and, on rare occasions, imprisoned for insider trading. Just because the SEC doesn't send you a personal email keeping you up to date on the investigation, that doesn't mean they aren't doing anything. You're out of the loop. The SEC and the exchanges do not give out details of their investigation to the media or other third parties. After a takeover, the first thing every exchange does is review who was on the right side of the trade and when, their related positions, etc. I enjoy ET but I've never seen a forum where there are more people talking out of their ass about things they know absolutely nothing about. No offense to those talking out of their ass. BLSH, you're absolutely right that there are people at the SEC who know nothing about the markets and nothing at all about options. I worked with some of those clowns and they are frustrating. On the other hand, when larger amounts of money are involved, the case usually gets kicked to SEC investigators who know what they're doing. Those people that bought Dow calls are about to get seriously raked over the coals. The contents of their accounts may already have been seized.