4 ms·

Go directly to jail, do not pass go, do not collect $10M.

by scarmig 3y ago

swarnie 3y ago
[flagged]
- yellowstuff 3y ago
  The SEC absolutely will be looking into this trade.
  - swarnie 3y ago
    [flagged]
    - booi 3y ago
      didn't they send martha stewart to jail?
      - yellowstuff 3y ago
        Technically her jail sentence was for lying about her insider trading, not for the original crime.
      - SkipperCat 3y ago
        Martha went to jail for lying to the Feds. If she just told the truth, she would have probably gotten no more than a wrist slap.
    - yellowstuff 3y ago
      Search for "insider trading convictions". They're not rare, and often result in jail time. Are most of the inside traders that get caught non-professional investors, because the pros know how to escape detection? Are the convictions a small fraction of the number of crimes? Is the SEC too focused on crimes that are easy to prosecute and ignoring more important systemic issues? I'd say yes to all, but the SEC is far from toothless in this type of case.
    - vkou 3y ago
      Insider trading is one crime that the SEC prosecutes regularly, because most people doing it are incredibly stupid.
- birdyrooster 3y ago
  that's the contract price, not the profits
zht 3y ago
isn't it closer to 400k?
- mrjaeger 3y ago
  I think $10M is right. The options cost $0.04 each yesterday (per the tweet), so spending $22,000 would get you 550000 options. Those options are now worth $18.30 (per the tweet) for a total value of ~$10M.
  - quickthrowman 3y ago
    An option contract with an ask of $0.04 costs $4. The trader bought 5500 options for $4 and they’re now worth $1830, so it’s still a $10M profit. The listed option price is the price per share, and a standard option contract is 100 shares of exposure.
    - mrb 3y ago
      No, the trader bought 260 options. See second photo in the tweet, first row, column "volume". 260 options times $4 equals $1,040 invested, which turned into $475k.
  - kawhah 3y ago
    None of the images in the tweet show either premium of $22k or 5,500 option contracts (eg options on 550,000 shares). What am I missing? The screenshots seem to show a total traded volume for yesterday of 260 contracts (26,000 shares), way smaller than what was suggested. Furthermore, nothing makes it clear that these were all the same person. And the open interest went down that day so at least some of this volume was buying to cover.
- scarmig 3y ago
  $22k * ($18.30/$0.04) = $10.065M
- msdrigg 3y ago
  22K * 45560 / 100 = 10023200
rs999gti 3y ago
Unless they are a politician :/ https://blogs.luc.edu/compliance/?p=4459 https://blogs.luc.edu/compliance/?p=4459
- deleted 3y ago
  [deleted]
- kasey_junk 3y ago
  You’ll note that opinion piece never actually outlines any special immunity from insider trading rules that Congress people have. What it’s really outlining is that the normal rules for insider trading aren’t enough for Congress people. Which is a reasonable position to take, but it’s not what the headline implies. There is no special immunity for insider trading for Congress. https://www.everycrsreport.com/files/20170412_RS21127_36174d2b18e501200b69074ce8f237e5d2832b15.pdf https://www.everycrsreport.com/files/20170412_RS21127_36174d...

Go directly to jail, do not pass go, do not collect $10M.

swarnie 3y ago

[flagged]

yellowstuff 3y ago
The SEC absolutely will be looking into this trade.
- swarnie 3y ago
  [flagged]
  - booi 3y ago
    didn't they send martha stewart to jail?
    - yellowstuff 3y ago
      Technically her jail sentence was for lying about her insider trading, not for the original crime.
    - SkipperCat 3y ago
      Martha went to jail for lying to the Feds. If she just told the truth, she would have probably gotten no more than a wrist slap.
  - yellowstuff 3y ago
    Search for "insider trading convictions". They're not rare, and often result in jail time. Are most of the inside traders that get caught non-professional investors, because the pros know how to escape detection? Are the convictions a small fraction of the number of crimes? Is the SEC too focused on crimes that are easy to prosecute and ignoring more important systemic issues? I'd say yes to all, but the SEC is far from toothless in this type of case.
  - vkou 3y ago
    Insider trading is one crime that the SEC prosecutes regularly, because most people doing it are incredibly stupid.
birdyrooster 3y ago
that's the contract price, not the profits

zht 3y ago

isn't it closer to 400k?

mrjaeger 3y ago
I think $10M is right. The options cost $0.04 each yesterday (per the tweet), so spending $22,000 would get you 550000 options. Those options are now worth $18.30 (per the tweet) for a total value of ~$10M.
- quickthrowman 3y ago
  An option contract with an ask of $0.04 costs $4. The trader bought 5500 options for $4 and they’re now worth $1830, so it’s still a $10M profit. The listed option price is the price per share, and a standard option contract is 100 shares of exposure.
  - mrb 3y ago
    No, the trader bought 260 options. See second photo in the tweet, first row, column "volume". 260 options times $4 equals $1,040 invested, which turned into $475k.
- kawhah 3y ago
  None of the images in the tweet show either premium of $22k or 5,500 option contracts (eg options on 550,000 shares). What am I missing? The screenshots seem to show a total traded volume for yesterday of 260 contracts (26,000 shares), way smaller than what was suggested. Furthermore, nothing makes it clear that these were all the same person. And the open interest went down that day so at least some of this volume was buying to cover.
scarmig 3y ago
$22k * ($18.30/$0.04) = $10.065M
msdrigg 3y ago
22K * 45560 / 100 = 10023200

rs999gti 3y ago

Unless they are a politician :/ https://blogs.luc.edu/compliance/?p=4459 https://blogs.luc.edu/compliance/?p=4459

deleted 3y ago
[deleted]
kasey_junk 3y ago
You’ll note that opinion piece never actually outlines any special immunity from insider trading rules that Congress people have. What it’s really outlining is that the normal rules for insider trading aren’t enough for Congress people. Which is a reasonable position to take, but it’s not what the headline implies. There is no special immunity for insider trading for Congress. https://www.everycrsreport.com/files/20170412_RS21127_36174d2b18e501200b69074ce8f237e5d2832b15.pdf https://www.everycrsreport.com/files/20170412_RS21127_36174d...