The following is the OptionBT sighting of    "EZ-money".
Go to Description Section
Title   :   "EZ-money"
Position Description  :
     Position taken   :     June 23,2004
     Eighteen Months out,
     Vertical Bull Put Spread for Credit,
     Long the 05 Dec 700 Puts (30,000 cnt) and Short the 05 Jun 800 Puts (30,000 cnt),
     Margin required,
     Long Puts out of the money by 244 points (Close June 23,2004 was 1044.04).
     Expiration/Settlement    :    December 16,2005 / Settlement = 1274.84

Count   :                     30,000 pairs
Credit or (Debit)   :     $19,500,000
Margin   :                   $300,000,000.
Results   :                   Net = max potential of +$19,500,000 if SPX settlement above 800.
                                        break even (if held to settlement) at SPX = 794

                                        All options expired worthless NET = +$19.5M


Comments   :   "EZ-money"

  The hard part for "EZm" is finding someone to fill this order given that that someone will have to pay "EZm" $19.5M on the front end. About the only player who could possibly see some benefit to this is someone who needs some 05Dec800 puts for inventory. Inventory which he is persuaded that he can sell later for a price higher than the $13.50 ($1350 per contract) that he is paying "EZm" for them here.

Not that they will have to go up a lot mind you, after all, we are talking 30,000 units. This means that the retailer who filled "EZm's" order needs to make $650 + on each of the 05Dec800 that he has in order to break even.

About this time this begins to make very little sense.
My experience, watching these masters at work, has shown that the more outrageous the behavior, the more interesting they are to watch.
We'll just have to wait and see if "EZ-money" finds it as easy as it looks right now or will it be his supplier who is betting on the come and building his inventory who is the one to take home the big money.

End Game:
Well it turns out that it was every bit as easy as it looked eighteen months ago. "EZ-money" was not even close to having to pony up any of the $300M in margin that he had put at risk. Those deep pockets were worth a little over a million a month in this case.


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