The following is the OptionBT sighting of
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Position Description   :
Position taken   :     December 08, 2003 and December 09,2003
Six Months out,
Two long positions taken on the 8th and sold on the 9th,
No Margin required,
Jun 18,2004 / Settlement = 1129.60
10000 long 04Jun825 calls (on the 8th).
10000 long 04Jun850 calls (on the 8th).
10000 04Jun825 calls (sold on the 9th).
9000 04Jun850 calls (sold on the 9th).
net = 1000 long 04Jun850 calls (open).
Credit or (Debit)   :
$453,300,000 - $447,100,000 = ($6,200,000)
No Margin Required.
Net = +$100,000 per point of SPX above 912 by 04 June SPX settlement.
With the settlement for June 2004 at 1129.60,
The 1000 long 04Jun850 Calls were worth $27,930,000.
Net minus the cost of ($6,200,000) was profit of $21,730,000.
Comments   :   "Wheel Barrow"
"Wheel Barrow"'s head spinning flamboyance and a willingness to risk the
big bucks sets this player in a class of those in the fast lane. Almost reckless,
like a wheel barrow with a load of bricks that is to heavy and too tall.
On the eighth of
December 2003 the SPX opened at 1060.93. The close for the day was
1069.3 which was right at the day's high.
The top figure, which is the end of day data set capture for the 8th of December,
shows that the bid and ask for these options have moved beyond
the last price. This indicates that
"WB" spent his $453M+ on the morning of the 8th.
On the morning of the 9th the market opened gap up with SPX at 1071.75
(which also turned out to be near the high for the day).
Sometime in this morning bustle "WB" sold all but 1000 of the 20,000 call
options that he had purchased the day before recovering all but $6.2M of his initial
Now incredibly "WB" is sitting on 1000 count of the 850 calls which
have a net cost of $6200 each. This means that he is break even at SPX = 912 and
will make $100,000 for each point the market advances.
This is a rather amazing thing. "WB" pays for an enormous number of options
and then turns around and sells them early the next day.
If "WB" had delayed on the morning of the 9th the market would have
taken away his opportunity at least for that day.
The SPX closed at 1060.18 on the 9th and if he hadn't
acted when he did he would be long the enormous position ($400M worth) of hard to move
deep in the money call options. Although it isn't quite as bad as that because in the days
following into January of 2004 the market took a big upswing and if he could have held
on to the 20,000 count then the reward would have been $2,000,000 a point.
The position turned out to be fine in the end, but was the idea to pair down to the
1000 count the original plan or was it just the opportunity of the moment that made it
Looking at the other side of the equation, someone sold the original
20,000 contracts to
"WB" only to have to buy almost all of them back when the market surged the next day.
One would think that whoever was on the receiving when "Wheel Barrow" dumped his load
would have had a miserable Christmas 2003.
For an idea of what happened to these same calls later on see the "Blues Brothers".
The 1000 long 04Jun850 calls ended up being worth $27,930,000.
Cost was $6,200,000. The net that "Wheel Barrow" took home was $21,730,000.
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