The following is the OptionBT sighting of    "My Hero".
Go to Description Section
Title   :   "My Hero"      Position taken   :     March 16,2001
Position Description   :
Six Months out,
50 point vertical bear put spread for debit,
Value of the spread is $5000/pair,
long side out of money,
short side out of money by 500 points.
Expiration/Settlement    :    September 2001 / Settlement = 939.57
Count   :                           850 pairs
Credit or (Debit)   :            ($2,822,000)
Margin   :                          None (Long Put Strike > Short Put Strike)
Results   :                          Value of the spread = $5000 * 850 = $4,250,000
                                        Less the debit = ($2,822,000)
                                        Net = + $1,428,000

Comments   : "My Hero"
  The reason this BigFoot is "My Hero" is that you almost never see a deep deep in the money vertical bear put spread for debit like this one. Even though when properly executed this is a very risk adverse position, there just aren't many examples. And for good reason.

Let me explain.

Look carefully at the Bid and Ask for each leg of this spread. The Bid and Ask shown for each of the two options in this spread are the end of day values. As you can see the Last price that "MH" received when he sold the 01 Sep 1650 Puts is way out of line. This is a function of a very volatile market and a trader that knows how to play the game.
Although we don't have the exact data to prove it there must have been a large down spike that allowed "MH" to sell the 1650's at the enormous price of $479 each.
This was a very volatile time. The SPX had dropped 100 points in the previous five days.

Most traders with average resources will not be able to jump in and put on this position one leg at a time. Apparently "MH" is one trader that can. If you or I were to purchase this position at the Bid and Ask prices shown then the position would loose money. Only the keen agility of "MH" was able to get the profitable prices needed to make this position a winner.

"My Hero" was nibble and quick and he took home a net $1.4m.

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