Options Trading Tutorial

Are puts considered private when protecting a drastic stock price?

Heard Ameritrade handled the put options, but I can't find any mention of it at their SPY financial page. Someone has pulled a bin Laden trade and has made nearly one billion dollars in puts for the SPY. I'm trying to find out more about this put that was made on the SPY. Google " bin Laden trade put 4.5 billion " . 4.5 billion dollars will be made by September 21st, 2007, if the puts don't expire first and if something causes the markets to drop by 30 to 60 percent. Terrorism threat/extortion? China drop-kicking US dollars for the $10 billion they lost in sub-prime loans? US Gov being blackmailed? You can read about it at this forum http://www.tickerforum.org/cgi-ticker/akcs-www?post=4669 The last pages of the forum holds the best information. Are puts considered confidential or are they posted on the 'Net somewhere? Been looking for several days and can't find the information.

Public Comments

1. Puts are exchange traded options; they are definately public as long as you are trading them. As a buyer of a put option, it gives you the right to sell your stock at a pre-determined price, called the exercise price. For instance, if you own stock now selling at $10 each and want to protect your portfolio against losses, you could buy a put option. Say, your stop loss is 10% loss. You would either sell your stocks when they fall below $9 each. However, this would not guarantee a stop loss because every seller would be freaking out and wanting to sell these stock. So, the stock price might even fall to say $7 each, missing your stop loss. To hedge against the extra loses, you would have bought put options that would give you a right to sell your stocks at $9 each regardless of how low the stock prices would fall. Another way of benefitting from options would be to write a spread. At the moment, because the market is bearish, writing bearish call spreads would be the best way to make a lot of money. However, because these spreads are credit spreads, no broker would let you write the spread, without you having an amount of cash in your account, should your credit spread go wrong and your written options get exercised. These strategies of write credit spreads are better left to more experienced investors. If you are fairly new at stockmarket inveting, I would suggest that you put your money in less volatile investment vehicles like fixed income stuff like savings bonds, CDs etc.
2. You have some wrong information here. The so-called "Bin Laden" trade didn't involve buying puts -- it involved selling deep in-the-money calls, which is also a bearish strategy. Whoever sold the calls will make money if the market crashes badly.
3. what i own is confidential...because i am a small fish. what my mutual fund owns is public due to securities laws that require disclosure.. an individual will buy or sell thru a brokerage house... so the brokerage house holds the security "in street name" ...meaning it's registered to the brokerage house... but ultimately it is owned by someone thru the brokerage house....good luck finding out who if they aren't required by law to report it. There was a TON of option activity on American Airlines stock days before 9/11 ... so this story hits a sensitive spot in conspiracy theorist literature.... I wrote something different but deleted it here.... after reviewing what you said... that is a rediculous amount of open interest in deep in the money calls.... SPy trades at 143.... there are only 2600 contracts in existance at 120... which by most estimates would be out of the money by quite a ways.... and only 736 contracts at 110... but at 90 and below there are over 10,000..... i cannot see option volume history though so i cannot confirm they traded recently.... anyways... fun stuff to keep you awake at night wondering what if....? hope for the best... plan for the worst... interesting catch though..... here's another one only this time involving Europe... http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=198297 but i cannot vouch for the validity of the claim in anyway.... great now i won;t be able to sleep... thanks