Thursday, August 30, 2007

Option mystery solved

Adam Warner has been writing about an option anomaly, a huge position in way out of the money options. Rumors started flying that someone had inside information about another terrorist attack and was using options to leverage their inside information. As with many wild rumors, and conspiracy theories, this wild rumor is unfounded. Turns out the trade was part of a package deal. If you are curious and well versed in options read about it here: link
Search for Dan Perper

My point is that wild rumors are easy to spread and easy to believe, and rarely are near the truth. Many newsletter writers take these rumors and half-truths (it is true that someone took that position), and twist them into stories to fit whatever they want to sell that day.

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