The following is the OptionBT sighting of    "Cofferdam".
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Title   :   "Cofferdam"
Position Description   :
     Position taken   :     August 15,2003
     One Month out,
     25 point put back spread (Nord Express) for credit,
     Total Margin $21M (see detail below),
     Short side out of the money by 89 points near time position taken.
     Expiration/Settlement    :    September 19,2003 / Settlement = 1039.60
Count   :                           2780 pairs + 180 uncovered short puts
Credit or (Debit)   :            $12,600
Margin   :                          $2,500 per pair * 2780 = $6,950,000
                                         180 uncovered short puts (strike of 825)= $14,850,000 (@100%)
                                         Total Margin = $21,800,000
Results   :                          Net = +$12,650 (if Sep 03 SPX settlement above 900)
                                         Special conditions (SPX @ 875 settlement) -$6.9M
                                         Special conditions (SPX @ 825 settlement) +$6.9M
                                         September Settlement SPX = 1039 , the $12,650 credit was retained.

Comments   :   "Cofferdam".
  Although "Cofferdam" looks pretty simple it is much more subtle, and therefore worth noting. This trade took place on the morning after the "Blackout of 2003" where 30 million people in NYC and the Northeast were without electrical power overnight, beginning with the first cascade shut off around 4:30pm E.T., August 14,2003. The idea behind this "Nord Express" style spread is to "buffer" against catastrophic decline.

No doubt this BigFoot called in and asked,
   "What would be the worst case scenario, and what can be done!".

Someone ( a very bright someone ) who manages this BigFoot's account put together this trade to help the big guy out and oh, by the by, he also managed to cover the cost with some extra short puts.
It's another example of how BigFoot like "Cofferdam" have access to some very bright people who can help protect their fortunes.

This example has very little practical application for the rest of us
(that is to say, those of us without $21M worth of margin), but it does offer some incite into reactionary behavior.
Let's don't tell this BigFoot, but this kind of spread only looks safe.
The appearance of security is what the BigFoot got and since it didn't cost anything the account manager should get kudos.
In the end the BlackOut wasn't a big deal and all these options expired worthless.
Let's hope this BigFoot sent his account manager a nice "Thank You" note.

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