Thursday, January 24, 2008

Mystery Trader betting billions on a catastrophe that the markets will crash and burn gets busted.

Someone is betting billions

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.

Financial News: Mystery Trader Bets Market Will Crash By Third

MarketTicker Forums Read Message in Breaking

BBC News
Incredulity as bank fraud unfurls
BBC News, UK - 1 hour ago
Questions have been raised over whether the trader was really acting alone, as the bank has claimed. But one man who has questioned Jerome Kerviel remains ...

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