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Wait do you mean they bought millions of dollars worth of put options or they bought put options they then sold for millions of dollars? Because anyone could j

Wait do you mean they bought millions of dollars worth of put options or they bought put options they then sold for millions of dollars? Because anyone could just buy a crap load of $0.10 options marked a week out, wait a few days, then tank the stock. It would look like you got stupidly lucky, I have no clue how anyone could connect that to the twitter event directly. Especially since it’s not like you’ll be the only one that “won the lottery”. (Tesla isn’t a great stock for doing this though because their IV is so high that the premiums are crazy expensive)

pcwalton 6y ago
> It would look like you got stupidly lucky Precisely why you would be caught.
- aeternum 6y ago
  https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in_tsla_call_gains/ https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in... So you would investigate this poster for insider trading? There are thousands of posts like this each week.
  - pcwalton 6y ago
    Search Google for "fbi insider trading press release". Every one of those people thought nobody would find out. They were wrong.
    - penagwin 6y ago
      Have you met r/wallstreetbets? While this certainly wouldn't be true for most people, many "day traders" make exactly these kinds of option plays that are in many cases literally just luck. There's many thriving communities around public market information before it's seen by the "mainstream". For these people buying $10,000 out of the money contracts on a random ticker is completely normal and still legal. So tipping somebody like that off would certainly hard to correlate.
  - deleted 6y ago
    [deleted]
eganist 6y ago
> It would look like you got stupidly lucky, I have no clue how anyone could connect that to the twitter event directly The more standard deviations you go into profitability, especially over one trade, the more likely you'll be to get the stink-eye. From that point, if someone raises a flag, it's just a matter of seeing whether they've been implicated in anything else. It's why departments that seemingly have no reason to have intel access are hooked into classified networks - precisely for this kind of data sharing.
AndrewBissell 6y ago
Does your account have a history of making those sorts of trades? That's a time-consuming and costly thing to fake. Is your position outsized relative to other punters in the OTM weeklies market? Most people don't bet the farm on one big lottery trade because the risk of ruin is too great. Will there really be that many people who time things as well as you do and haul in a bonanza payout as though they had perfect foresight? A lot won't even be watching the market for the 5 or 10 minutes your rumor moves the stock, and of those who are, a lot of them will hang on for moar gainz.
aeternum 6y ago
Right, purchase something like 200-300k worth of OTM options with low enough IV, tank the stock, cash out for 2-3mil. A 10x increase isn't all that crazy and and this trade is indistinguishable from someone that just likes to gamble on short-term options. Pay your taxes and brag to your friends about how you should start a hedge fund.
- Enginerrrd 6y ago
  Just doing that would be suspicious. Establishing a record of doing similar things for months to a year before the hack and THEN doing it, and continuing to do so for other stocks for a while after... well, then there'd be a LOT more plausible deniability.
  - penagwin 6y ago
    r/wallstreetbets calls these (rather unfortunately) "fd" options. Basically you can use not that much money to buy unlikely to be profitable options and make an actual crapload of money - and it would look identical to just being lucky. The thing is 90% of people don't trade options themselves, and 99% of people don't do random fd plays. If you tipped off someone from WSB then they'd likely get away with it - that's what they do. Tip off a family member who has never traded options before, well....

pcwalton 6y ago

> It would look like you got stupidly lucky Precisely why you would be caught.

aeternum 6y ago
https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in_tsla_call_gains/ https://ns.reddit.com/r/wallstreetbets/comments/how6us/1m_in... So you would investigate this poster for insider trading? There are thousands of posts like this each week.
- pcwalton 6y ago
  Search Google for "fbi insider trading press release". Every one of those people thought nobody would find out. They were wrong.
  - penagwin 6y ago
    Have you met r/wallstreetbets? While this certainly wouldn't be true for most people, many "day traders" make exactly these kinds of option plays that are in many cases literally just luck. There's many thriving communities around public market information before it's seen by the "mainstream". For these people buying $10,000 out of the money contracts on a random ticker is completely normal and still legal. So tipping somebody like that off would certainly hard to correlate.
- deleted 6y ago
  [deleted]

eganist 6y ago

> It would look like you got stupidly lucky, I have no clue how anyone could connect that to the twitter event directly The more standard deviations you go into profitability, especially over one trade, the more likely you'll be to get the stink-eye. From that point, if someone raises a flag, it's just a matter of seeing whether they've been implicated in anything else. It's why departments that seemingly have no reason to have intel access are hooked into classified networks - precisely for this kind of data sharing.

AndrewBissell 6y ago

Does your account have a history of making those sorts of trades? That's a time-consuming and costly thing to fake. Is your position outsized relative to other punters in the OTM weeklies market? Most people don't bet the farm on one big lottery trade because the risk of ruin is too great. Will there really be that many people who time things as well as you do and haul in a bonanza payout as though they had perfect foresight? A lot won't even be watching the market for the 5 or 10 minutes your rumor moves the stock, and of those who are, a lot of them will hang on for moar gainz.

aeternum 6y ago

Right, purchase something like 200-300k worth of OTM options with low enough IV, tank the stock, cash out for 2-3mil. A 10x increase isn't all that crazy and and this trade is indistinguishable from someone that just likes to gamble on short-term options. Pay your taxes and brag to your friends about how you should start a hedge fund.

Enginerrrd 6y ago
Just doing that would be suspicious. Establishing a record of doing similar things for months to a year before the hack and THEN doing it, and continuing to do so for other stocks for a while after... well, then there'd be a LOT more plausible deniability.
- penagwin 6y ago
  r/wallstreetbets calls these (rather unfortunately) "fd" options. Basically you can use not that much money to buy unlikely to be profitable options and make an actual crapload of money - and it would look identical to just being lucky. The thing is 90% of people don't trade options themselves, and 99% of people don't do random fd plays. If you tipped off someone from WSB then they'd likely get away with it - that's what they do. Tip off a family member who has never traded options before, well....