The following is the OptionBT sighting of
"On My Mark".
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"On My Mark"
Position Description   :
Position taken   :     December 08,2003
Nine Months out,
50 point vertical bear put spread for credit,
Margin required per pair $5,000/pair,
Short side out of the money by approx. 115 points at time of trade.
Sep 17,2004 / Settlement = 1127.02
Credit or (Debit)   :
$5,000 per pair * 400 = $2,000,000
Net = +$356,000 (if 04 Sep SPX settlement above 950)
Comments   :   "On My Mark"
"On My Mark" demonstrates great insite into the market movement for this
day. Look carefully at the DockF shown in the figure above and at the bottom you
will see two sets of numbers. The Buy, Sell, and Net totals on the lower left
are based on the Last prices show. The Buy, Sell, and Net totals on the lower right
are based on the bid and ask (which for this snapshot are computed from the
end of day bid and ask).
As you can see there is a slight difference in the numbers. A slight $100K difference that is.
There is a big lesson here.
This BigFoot knows his marks.
In fact a review of the time of trade data shows that "OMM" sold the 950 Puts for $27.80
on or about 1:25 p.m. EST and bought the long 900 Puts for $18.90 on or about 3:30 p.m. EST.
This last purchase was after the market had a late afternoon rally of six points or so.
The fact that "OMM" shorted the 950's first and bought the 900's later demonstrates that
this trader knows his market. By knowing his marks he was able to pick up an addition $100K.
If you or I had put on this trade "at market" with the bid and ask shown we would have
received $250 less credit for each of the 400 pairs.
Everything about this trade is comfortable. The distance out of the money is over 100 points.
The time until expiration is nine months.
The $2Million in margin is not excessive. The final spread achieved thru market timing is
well done. The return on investment (or margin in this case) is reasonable.
Overall we must give "On My Mark" high marks.
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