900 Mil PUT trade: Euro crashes 2 weeks

[GlassSteagallfan]

http://beforeitsnews.com/international/2013/03/900-million-says-euro-crashes-in-2-weeks-put-trade-rocks-london-options-market-2454160.html

$900 Million Says Euro Crashes In 2 Weeks: PUT Trade Rocks London Options Market
Someone has placed a GIGANTIC $900 million EURO PUT trade on the Euro to crash vs. the dollar within 2 weeks. Is this a 'smart bet' by someone who has seen the writing on the wall with the situation in Cyprus or does someone have inside knowledge that something big is about to happen? Beware! We have seen this before as shared in the videos below; in fact, it happened prior to September 11th, 2001, and we ALL saw what happened thereafter. This story is brought to us by Derivatives Intelligence (http://www.derivativesintelligence.com/Article/3176278/News/Big-Put-Trade-Rocks-Fx-Mart.html?LS=Twitter).:


http://www.derivativesintelligence.com/Article/3176278/News/Big-Put-Trade-Rocks-Fx-Mart.html?LS=Twitter


http://www.youtube.com/watch?v=DNGFEL-qfwg&feature=player_embedded

http://www.youtube.com/watch?v=X1t5anm6Uyo&feature=player_embedded

[crosby]

cheezuz....... do they post the information on who placed the put?
regards, corson

¤=[Post Update]=¤

http://moneymorning.com/2007/08/29/this-900-million-bet-has-global-traders-talking%E2%80%A6/

By Keith Fitz-Gerald
Contributing Editor

"Insiders trade when they know something. They’re not supposed to, but they do anyway. It’s just a fact of life.

Most of the time, it’s pretty petty-ante stuff, but occasionally a trade comes along that makes even jaded professionals like me sit up and take notice.

Just such a trade surfaced last Wednesday when anonymous parties agreed to buy and sell 120,000 SPY September call options using deep-in the-money strikes ranging from 60 to 95."


this is the only article from any mainstream(notice the date) that i can find regarding such puts. but i am digging quickly to see where this is going.
corson

[crosby]

i tried to get a free trial of the derivatives intelligence and they wouldn't let me in because i do not have a corporate email account. i will definitely keep trying. i smell a BIG rat.
regards, corson


http://investmentwatchblog.com/we-decide-today-if-cyprus-stays-in-euro-head-of-the-central-bank-of-cyprus-germany-rejects-cyprus-pension-fund-plan-people-are-running-out-of-cash-petrol-stations-in-fear-of-closing-down-cyprus/


so far, i have found this blog spot, but i do not see any real discussion about 900 million in puts. so, without being able to access the derivatives article completely, there is no way of knowing what is actually taking place. i do imagine that major hedging is taking place right now, but i would think that 900 million in puts is something that would be being watched by stock watches not just here in the states but globally, especially since what happened pre-9/11. if it has any merit, it will out itself here in the near future.

[Hawkwind]

A put trade on a derivative DOES NOT necessarily mean someone expects the market to crash. It means someone either thinks the current value of the derivative is worth the protection it provides against a decline in the value of the Euro, or (more likely) that the value of the derivative will increase before its expiration date. In the first scenario- if I hold $1 trillion of financial instruments valued in Euros and I estimate there is a 10% chance of them losing 10% of their value over the next two weeks then an investment of up to $1 billion in 10:1 leveraged financial instruments which would offset that loss makes sense. In the second scenario- if I expect the level of perceived risk of the Euro losing value to increase over the next two weeks, then financial instruments like this derivative will increase in value. The value of the Euro itself needn't actually fall at all in this situation, it could even increase in relative value- so long as the fear of it falling increases.
This isn't to say that there isn't risk or even plans of an actual collapse. That certainly, however, isn't the only (or the most likely) explanation for this kind of transaction.

[crosby]

hi Hawkwind, i couldn't agree more. what i see is that these kind of stories sometimes set off the 'fear' whistles and bells in the general public when they do not have any factual evidence to stand on. this story is making it's way through many of the forums, but it may have no factual basis. i see similarities in the 2007 article that i referenced above, but nothing of any major significance anywhere else, except for the derivatives article that nobody can get access too. so, i guess this all remains to be seen. stay tuned!
corson

[Tesseract]

If the €900m refers to the value of the controlled derivatives, then the actual amount of investor cash risked here is likely somewhere in the 10s of millions, and maybe less... I agree with Hawkwind's statement about profiting from an increase in value of the derivative. Concern over the Cyprus situation will reach fever pitch as the end of the bank holiday approaches, driving a loss in the value of euro derivatives. Assuming no bail-out deal is announced over the weekend these options could be off-loaded on Monday morning for a nice profit.

I think it would be risky to hold onto the puts for too long, since in the past we have seen a history of last-minute bail out deals occurring. And €10b is really not a lot of money for all of Europe to be squabbling over. It is, I agree, possible that the player here is betting on a worst case scenario playing out - I just think that that would be pretty risky, therefore unlikely, unless the punter had the inside info...