The following is the OptionBT sighting of    "Hidden Assets".
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Title   :   "Hidden Assets"
Position Description  :
     Position taken   :     October 29,2008
     8 months out,
     Vertical Bull Call Spread
     Long the 09 Jun 950 Calls (1000 cnt), Short the 09 Jun 975 Calls (1000 cnt)
     No Margin required,
     Close on the day of trade October 29,2008 was 930.09
     Expiration/Settlement    :    June 19,2009 / Settlement = ????

Count   :                     1000 long call options, 1000 short call options.

Credit or (Debit)   :     ($1,250,000)
Margin   :                   none required

Results   :                   Net Potential = +$1,250,000 if June 2009 Settlement above 975.0

                                       

Comments   :   "Hidden Assets"


09Jun950 Call (SXBFJ) 10/29/2008 12:08:28 CBOE 1 117.00 Group I
TIME/SALES: 10/29/2008 12:33:29 CBOE 125 122.00 Group A
10/29/2008 12:33:29 CBOE 125 122.00
10/29/2008 12:43:18 CBOE 84 122.00 Group B
10/29/2008 12:43:18 CBOE 83 122.00
10/29/2008 12:43:18 CBOE 83 122.00
10/29/2008 12:51:34 CBOE 84 122.00
10/29/2008 12:51:34 CBOE 83 122.00
10/29/2008 12:51:34 CBOE 83 122.00
10/29/2008 13:46:18 CBOE 84 122.00
10/29/2008 13:46:18 CBOE 83 122.00
10/29/2008 13:46:18 CBOE 83 122.00


09Jun975 Call (SXBFO) 10/29/2008 12:33:42 CBOE 125 109.00 Group A
TIME/SALES: 10/29/2008 12:34:40 CBOE 125 109.00
10/29/2008 12:43:24 CBOE 83 109.00 Group B
10/29/2008 12:44:14 CBOE 83 109.00
10/29/2008 12:44:32 CBOE 84 109.00
10/29/2008 12:51:59 CBOE 83 109.00
10/29/2008 12:52:34 CBOE 84 109.00
10/29/2008 13:41:15 CBOE 83 109.00
10/29/2008 13:46:34 CBOE 83 111.00 Group C
10/29/2008 13:50:35 CBOE 84 111.00
10/29/2008 13:56:35 CBOE 83 111.00
10/29/2008 15:19:27 CBOE 1 114.00 Group I


Narative:
The information above is the time and sales data for the options involved in this trade. This T/S lists "all" the trades made on October 29,2008 for the options shown.

"Hidden Assets" are easy to overlook. The T/S data has been labeled into groups in order to show more clearly how this works. The separation of this 1000 count order into smaller pieces is the way that this bet is laid off to several participants. Another little mentioned part is the increase in the amount of commission to the specialists. What is really clever is how the Group C of the 09Jun975 Calls are traded at $111.00 making the total amount of the cost of this spread exactly $1,250,000. This is also the actual value of the net proceeds from this trade were this spread to make its full potential with the SPX closing above 975 in June 2009 and the options held to expiration. This would produce a 100% gain or a "double".

Right now in October of 2008 the odds are pretty good that this spread will make. The break even (no loss no gain) occurs at the SPX settlement value of 963. "Hidden Assets" is working on the assumption that the bottom is in and that the next six months will yield enough upside to justify a bet of this size.

If that was all there was to it, this example would not be so interesting.

Look carefully at the T/S data and what is labeled Group I. This is an individual trader with a "one count". Remarkably this trader "legs in" early in the day with the purchase of a 09Jun950 call and then at the very end of the day shorts the 09Jun975 call to complete his spread. The good news is that his spread cost him only $3 while "HA" paid $12.50 for each of his pairs.

If the spreads make, "HA" will make 100 percent while the little guy will make a whopping 833 percent.

For this little guy, his $2200 reward for his $300 investment will be more satisfying to him than "HA's" $1.25M take.
He has only $300 at risk which is a lot easier to sleep on than the $1.25M risk which "HA" must contend with.

This "legging in" business requires a little skill and a lot of luck.
None the less, this kid has earned some attention.
If this "Hidden Asset" can maintain this high level of execution,
he is well on his way to becoming a BigFoot.





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