The following is the OptionBT sighting of
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Position taken   :     March 01,2002
Position Description   :
Jun 02 close is two and a half months out,
This is a call bear spread for credit,
Short the 1200 Calls for June 2002,
Long the 1250 Calls for June 2002,
Short side out of the money by 69 points.
June 2002 / Settlement = 991.33
Credit or (Debit)   :
Comments   :   "Trendinator"
This is not an uncommon position for a BigFoot
to take but the size is significant.
The "Trendinator" thinks that there is very little upside risk
even though his short side is only 70 points higher than the market
close for the day and there are only two and a half months to go until expiration.
When the "Trendinator" was spotted it was impossible to really guess which side
was going to become the victor. One set of analysts said the market would go higher and
one set said it would go lower. The guys who said "lower" were correct.
As you look at the last,bid, and ask for the calls in the figure above you will see that the
last price is below the bid for both calls. Since the data set used to spot this BigFoot
was end of day and the SPX closed up 25 points it would appear that the "Trendinator"
made his transaction early in the day.
Since it is most likely that
two traders took opposite sides of this position,
the bull (the trader that bought the 02Jun1200 calls and
sold the 02Jun1250 calls probably was the "Initiator" of this transaction).
He was probably feeling pretty good about himself by the end of the
day since as we said the SPX closed on a high note.
The "Trendinator" however showed no fear and his bear side of this transaction, which
flew in the face of the "logic of the day", proved to be the winning call.
We now know that two and a half months later
the SPX was down 140 points from the close on the day of this trade.
The "Trendinator", if he let all the calls expire worthless (this is highly likely),
took home $1.6M for his two and a half months of effort and his $8M margin risk.
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