The following is the OptionBT sighting of    "Serious Money".
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Title   :   "Serious Money"
Position Description  :
     Position taken   :     June 16,2005
     Three months out,
     GapMan (Two Vertical Spreads using Call and Put Options for Debit,
     Long the 05 Sep 500 (40,540 cnt), Long the 05 Sep 1500 Puts (40,540 cnt)
     Short 05 Sep 1500 Calls (27,540 cnt), Short 05 Sep 500 Puts (27540 cnt).
     No Margin required,
     Close on the day of trade June 16,2005 was 1210.96.
     Expiration/Settlement    :    September 16,2005 / Settlement = 1232.79

Count   :                     81,080 long options, 55,080 short options
Credit or (Debit)   :     ($4,017,238,600)
Margin   :                   non required

Results   :                   Net = $36,761,400 at September 2005 Settlement.
                                       

Comments   :   "Front Money"

  "Serious Money" is the largest GapMan recorded to date.

Up to this point the record was with GapMan Record (GMR). Now this is a horse of an entirely different dimension. It is an important event when this much money goes down in one day and one trade. It is "serious money" when $4 Billion changes hands.

The GapMan is a lender (in this case a "big" lender). The other side of the trade sells this enormous position and holds the $4B for the next three months. Then the seller has to pay $36.7M for the priviledge of holding the money.

The annualized percent of return for "Serious Money" is not much, however $36M is a nice piece of change anyway you can get it.

The really interesting bit is not that this transaction, with it huge scale, happens at all, because that part is easy to understand. This is just a short term loan with no paperwork.

The less obvious part is why.....




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