Saturday, September 08, 2007
Market Crash By September 21
Linked to September 11, 2007?
Mystery trader bets market will crash by a third
An anonymous investor has placed a bet on an index of Europe's top 50 stocks falling by a third by the end of September, as world equity markets plunged for a third day and volatility hit a three-year high.
The mystery investor has bought put option contracts on the DJ Eurostoxx 50 index that will result in a profit if it plunges to 2,800 or below by the end of September. Based on the 2,800 strike price, the position covers a notional €6.9bn, and potentially even more using a market price of about 4,100 when the trades were done on Tuesday and Wednesday.
The identity of the investor is unknown but market sources speculated it was either a large hedge fund hedging itself against deepening losses, or a long-only fund manager pressing the panic button to protect its gains.
The investor has bought a total of 245,000 put options on the index. The September put option with a 2,800 strike was the most popular DJ Eurostoxx 50 contract yesterday, according to data from Bloomberg.
Volatility in European equity markets has risen sharply this week as investors cut back on the amount of risk they are taking. The VSTOXX index, which measures the volatility of the DJ Eurostoxx 50 index, hit 34 this morning, which is more than double its three-year average.
Similarly the volatility of the US stock market was trading at almost three times its three-year average, hitting 30 yesterday.
However, both indices continue to trade below their 2002 highs.
ANOTHER HUGE SALE OF OPTION CONTRACTS ON $4.5 BILLION WORTH OF STOCKS BETTING THE MARKET WILL LOSE 30%-50% OF ITS VALUE IN FOUR WEEKS!
THIS SALE ON THE SPY.X AND THE ONE FROM YESTERDAY ON THE SPY.Y (MENTIONED TWO STORIES BELOW) ARE BEING REFERRED-TO BY FOLKS IN THE MARKET AS "BIN LADEN TRADES" BECAUSE ONLY AN ACT OF TERRORISM AKIN TO 9-11 (WITHIN THE NEXT FOUR WEEKS) COULD MAKE THESE 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 $ 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 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.
THEORIES:
The following theories are being discussed widely within the stock and options markets today regarding the enormous and very unusual activity reported above and two stories below. Those theories are:
1) A massive terrorist attack is going to take place before Sept. 21 to tank the markets, OR;
2) China, reeling over losing $10 Billion in bad loans to the sub-prime mortgage collapse presently taking place, is going to dump US currency and tank all of Capitalism with a Communist financial revolution.
Either scenario is bad and the clock is ticking. The drop-dead date of these contracts is September 21. Whatever is going to happen MUST take place between now and then or the folks involved in these contracts will lose over $1 billion for having engaged in this activity.
Still, I can't help but wonder if the above is just grist concocted by those who believe phase shifting aliens run the political world or if there is some degree of truth to it. Time will tell, I guess.
I also find the following to be rather eerie. I'm not a big believer in numerology or that numeric patterns always mean "X". But consider this:
Take the numeric date of September 11, 2007: 9-11-2007
Adding the sum of the numbers backwards, starting with the year 2007: 7+0+0+2 = 9.
Add the digits of the day, the 11th, to the number of the month, "9": 1+1+9=11
So this year's date of 9-11, backwards, adds up to 9-11.
Also, September 11, 2001 fell on a Tuesday. September 11, 2007 also falls on a Tuesday, the first time since 2001 that this date reoccurs on a Tuesday. We know al Qaida takes pride - if one can call it that - in anniversary dates. And 9-11 is also the emergency telephone number...911.
I don't know that this is anything other than a coincidence, but ...am I the only one who finds it slightly unnerving?
©2007
Labels: Market Crash September 21 2007
Another interesting coincidence this year is that the first day of Rosh Hashanah and Ramadan both fall on the same day this year--Sept 12--one day later.
Rosh Hashanah is the "Feast of Trumpets" and some Christians believe the rapture is supposed to occur somewhere around the Feast of Trumpets.
Also falling on September 12 this year, the planet Venus (Morning Star--symbolic of Christ) is at it's closest proximity to the earth, and Mercury (Messenger) and the Moon (symbolic of Allah, but also of the Hebrew Yaweh) are in conjunction that day. Because September 11 is also the New Moon, it follows that there would also a loose conjunction of *all four* of those celestial bodies on the 12th (Sun, Moon, Mercury and Venus).
For what it's worth.
With a healthy discount to account for "phase shifting aliens" and general paranoia, of course...
And yes, we cannot discount the phase shifting aliens.
: 11:53 AM, September 09, 2007 We'll see if the market crashes by 9-21.
Arrggh - or are you talking about the adding up of numerics in the date? That's what they add up to, like it or not. I'm not saying I believe there's a conspiracy there, but it is rather odd.
: 12:03 PM, September 19, 2007 << Home
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