Tag Archives: options

Two ‘Weaks’

2008 is off to a terrible start.  Check that.  2016 is off to a terrible start.  It is the worst two 'weaks' the market has ever seen to start a year since the Bronze Age Collapse in 1206 BC.  There are no stats on how many precious metals bugs were around back then, but there wasn't much money in television appearances and book sales during that era.  Today fear sells and for the last 8 years the same people have been trying their best to sell it.  Perhaps 2016 is the year the get it right.

Heading into 2016 I made quite a few predictions.  I did not think two weeks in many of them would already be coming to fruition.

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Someone is Betting Big That This Stock Will Fall

It started two hours after the market opened and it stopped around lunch time.  In the span of an hour someone was going coo coo for Cocoa puts.  Spoiler alert... they weren't buying puts on Cocoa, but they were going coo coo,  as in hitting the ask with seemingly reckless abandon.  Patience was not a virtue for this put buyer.  With the spread at bid $.15 ask $.60 the buyer was picking up all he/she could handle at $.60.  These options expire in March and up to today had zero open interest.  No one wanted to buy these puts, and no one wanted to sell them.

All together someone bought more than $240,000 of far out of the money options, in a bet on significant downside within the next month.  This trade brings back memories of the $LNCO trade in January 2013.  A giant unusual option trade that made little sense at the time ended up making the trader millions of dollars.

Is that what we will see with this unusual trade?

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