What can I do about insider trading activity in stock options that cause financial harm?

to think that you can outperform the market makers on the floor is ....... ..
fill in the blank.

to answer your original question what can i do about insider trading?
the answer is nothing. to top it off you have no proof. there is activity surveillance at every exchange. let them do their job and you use your time more constructively.

 

It may have been Jesse Livermore that said "when the school marm starts dancing on the table, it's time to leave the bar".

To me, watching someone super aggressively buying DOTM options is that school marm.

 

Isn't this "possible insider trading" one of the risks that you face when you sell short-dated OTM options? When picking pennies in front of the steamroller, you shouldn't be too surprised when occasionally you get flattened, no?

Realistically, the issue is that it will probably be difficult to prove that the buyer acted on the basis of non-public info. You can certainly attempt to allege improper behaviour and report the particular pattern of trading to the SEC/others (in fact, it may be your duty to do so). However, given everything, it's unlikely to be of much help to you, so it might not be worth investing too much time in it. Just my $Z2c...

 

Thank you for sharing your insights.

And good luck to you.

 

Also, it looks like there is more than one way to skin a cat: Nassim Taleb, the author of Black Swan, often took the opposite side of your trade. He advocated taking regular small losses and when a black swan hit, he got big payoffs. He claimed he made enough to be very wealthy.

 

I don't know if his wealth comment is true. however, he has turned himself successfully into a cult figure. he has co-ed groupies (attractive ones)who follow him on his lecture tours

 

That's Big -- i bet you wish you took the other side of that trade instead

 

Ummmm...did you see that I'm doing this a long time, I do it for a living, and that I'm very successful with it? I guess not. I could teach you how to improve YOU'RE trading! I just came on here to get insight on regulatory process. Thanks for nothing, though...

 

Good one, Lawrence! It never works out that way, though, does it? LOL

 

To the first part...I don't really know what you're trying to say. Not that it matters, lol. I do know that I've been doing this for a long time, it's what I do for a living, and the brokerage account balance looks terrific. As for the second part, I agree it's likely that nothing gets done. Nothing wrong with learning about the process and possibly getting the criminals shaking in their boots, though...if time permits, agreed.