How to turn $92,000 into $2,000,000.00 in 24 hours

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FelixDeCat

FelixDeCat

Lifer
Aug 4, 2000
29,805
2,349
126
Buffet and a group of investors are buying HJ Heinz. However, the night before the announcement a huge amount of cheap stock options were purchased, leading to a 2,000% windfall and a newly minted millionaire.

Coincidence? :whiste:

Was Warren Buffett's Heinz Acquisition Leaked? Suspicious Options Data Points To Yes

http://www.forbes.com/sites/jordanm...-options-data-points-to-yes/?partner=yahootix


In a surprise announcement today, billionaire Warren Buffett‘s Berkshire Hathaway announced it had agreed to purchase food giant H.J. Heinz Co. for $23.2 billion, with shareholders set to receive $72.50 a share – a nearly 20% premium to Heinz’s closing price yesterday. While those shareholders are no doubt counting their good fortune today, it appears that advance news of the announcement may have leaked yesterday afternoon judging by options market trading activity.



Indeed, historical options data shows that trading in the June $65 calls yesterday was nearly non-existent, with only 14 contracts purchased Tuesday and not a single contract on Monday. This trend continued into Wednesday, until 1:31:32 P.M., that is. In a one hour span from just after 1:30 P.M. to 2:30 P.M., over 2,500 contracts were purchased for a total outlay of nearly $92,000. In less than 18 hours, those same contracts would be worth nearly $2 million more after news of the deal broke.
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More interesting info is in the article.

2/15/13 Update:

The S.E.C. is focusing on the sudden leap in options trading Wednesday, building on a related case it filed last year that also involved 3G, a company with Brazilian roots. In September, the agency obtained an emergency court order to freeze the assets of a Brazilian man suspected of insider trading around 3G Capital's takeover of Burger King. The trader, a Brazilian citizen who worked at Wells Fargo in Miami, reportedly received the tip from a 3G investor.


Neither the company nor any individual at 3G has been accused of any wrongdoing in that case or in the Heinz inquiry.


While the inquiry is in its early stages, the person briefed on the matter said that regulators could take relatively prompt action. If it is concerned that traders might move the money overseas, the S.E.C. could ask a federal court to freeze the traders' assets.


The S.E.C. routinely opens inquiries into trading activity after major mergers are announced, but often does not bring charges. The agency, however, has renewed its focus on insider trading, mounting dozens of cases in recent years.


An S.E.C. spokesman declined to comment. Bloomberg News earlier reported that S.E.C. investigators were reviewing the surge in Heinz options trading.
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ImpulsE69

ImpulsE69

Lifer
Jan 8, 2010
14,946
1,077
126
Unless he was downloading music and movies off the internet, or a teacher having sex with a student, he'll get away with it. No one cares about insider trading these days. :p
 
T

T9D

Diamond Member
Dec 1, 2001
5,320
6
0
Pretty much every stock works like that. It's just normal everyday business these days.
 
Murloc

Murloc

Diamond Member
Jun 24, 2008
5,382
65
91
they're sure gonna like dat nice puffy office ass in prison. Unless they get sent to very low security prisons.
 
Attic

Attic

Diamond Member
Jan 9, 2010
4,282
2
76
So basically that investment was never purchased because anyone without inside information wouldn't have any reason to by them so far out of the money.


Whoever bought those 2500 contracts knew about the deal obviously. It's glaring. Don't expect anything to be done about it, this kind of thing and worse goes on all the time and many times each day in the market.

The market is so fraudulent and abused it's incredible to witness. Stick to the professionals investing with a conservative/modest return mindset and you'll be ok.
 
Slew Foot

Slew Foot

Lifer
Sep 22, 2005
12,379
96
86
Unless the person who did this is Martha Stewart, nothing will happen. Wouldnt surprise me if members of congress are in on this, remember, insider trading is legal for them.
 
BrokenVisage

BrokenVisage

Lifer
Jan 29, 2005
24,770
12
81
mxe1R.png
 
ImpulsE69

ImpulsE69

Lifer
Jan 8, 2010
14,946
1,077
126
The market represents everything that is wrong in the world. It's the worlds biggest pyramid scheme. It needs to be abolished completely and everyone involved in it thrown in camps WW2 style. Unfortunately human greed knows no bounds and if it wasn't this, it'd be something else.
 
dr150

dr150

Diamond Member
Sep 18, 2003
6,570
24
81
SunnyD said:
I bet I can give Goldman Sachs $1 and make some n00b investment banker there a billionaire by the end of the year. (Note, I probably would lose my $1 in the process)
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Without question. If you work in the financial industry, info. gets passed around between MBA buds....leads to a LOT of shady but prosperous investing.
 
brianmanahan

brianmanahan

Lifer
Sep 2, 2006
24,471
5,884
136
i guess you people don't realize that this will only hurt the institutions which were selling the derivatives (who you would also hate)?

also, the fact that insider trading is illegal is mildly stupid

but the fact that it is not illegal if you are in congress is severely retarded
 
W

wirednuts

Diamond Member
Jan 26, 2007
7,121
4
0
sunzt said:
Yet they can't send anyone to jail for the billions and billions lost in '08
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i can see why nobody goes to jail though. martha was just an example they made. thats different.

why go to jail when you didnt directly hurt someone? i mean, yeah, bringing the entire economy down and forcing millions of people into crime ridden poverty is bad... and theres hundreds of thousands of deaths and suicides because of that... but thats all indirect consequences so who cares.
 
W

wirednuts

Diamond Member
Jan 26, 2007
7,121
4
0
brianmanahan said:
i guess you people don't realize that this will only hurt the institutions which were selling the derivatives (who you would also hate)?

also, the fact that insider trading is illegal is mildly stupid

but the fact that it is not illegal if you are in congress is severely retarded
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the fact that nearly all forms of gambling are illegal outside sanctioned native reservations is whats mildly stupid. why dont the feds want legalized gambling? because thats their business. its called wallstreet. and they make a lot more then the native americans do...

in wallstreet, if you are the ceo then you are the house. you know the rules and you know how to not lose. you also know how to give friends the information needed to make a lot of money off your own legalized gambling *oops i mean stocks*
 
brianmanahan

brianmanahan

Lifer
Sep 2, 2006
24,471
5,884
136
wirednuts said:
the fact that nearly all forms of gambling are illegal outside sanctioned native reservations is whats mildly stupid. why dont the feds want legalized gambling? because thats their business. its called wallstreet. and they make a lot more then the native americans do...

in wallstreet, if you are the ceo then you are the house. you know the rules and you know how to not lose. you also know how to give friends the information needed to make a lot of money off your own legalized gambling *oops i mean stocks*
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lol, stocks = gambling?

they are actually partial equity ownership of a company

also most forms of gambling have not historically returned %9 annually over nearly a century for the gambler

gambling yields a slightly negative return
 
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