The following is the OptionBT sighting of    "RedWood".
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Title   :   "RedWood"
Position Description  :
     Position taken   :     March 18,2004
     Fifteen Months out,
     Vertical Bull Put Spread for Credit,
     Long the 05 Jun 750 Puts (3000 cnt) and Short the 05 Jun 950 Puts (3000 cnt),
     Margin required,
     Short Puts out of the money by 172 points on Close (Mar 18,2004).
     Expiration/Settlement    :    June 17,2005 / Settlement = 1222.68

Count   :                           3000 pairs

Credit or (Debit)   :            +$7,500,000

Margin   :                          For the 2000 pairs at $20,000 each = $60,000,000

Results   :                          Net = max potential of +$7,500,000 if all options expire worthless.
                                        break even (if held to settlement) at SPX = 925.31

                                        SPX SET= 1222.68 all options expired worthless NET = $7.5M


Comments   :   "RedWood"

  We haved learned that during a rain storm not to stand next to the tallest of trees. This is because lightning may strike. During the early part of March 2004 there wasn't much of any kind of storm in the market place. Rates are low and there is a lot of upside room to expand. Under these conditions it is probably not that bad of an idea for a BigFoot tracker to go stand shoulder to shoulder with a tall "RedWood". Anyone with this much margin ($60M) is not in a hurry and not prone to taking a large amount of risk. What "RedWood" may be telling us is that everything is going to be OK and let's not rush things. He is under the market now and it certainly appears that the SPX can manage to stay above 950 given enough time.
Maybe since options trading is mostly an indoor activity the probability of a lightning strike is greatly reduced. Let's hope so because the "RedWood" long term fade approach is certainly laid back and very interesting to watch.

Caution:
If you take a stand next to "RedWood" don't close your eyes. If this tree runs off you need to too.
End Game:
Congratulations "RedWood", your $60M margin brought in a $7.5M takehome. It is good to be standing outside the box.

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