Famous options stories

E

earth_imperator

"[...] a trader spent $53,000 buying a large number of call options that were extremely cheap, since they were so far out-of-the-money that other traders thought it was very unlikely that they would ever hold intrinsic value. However, these options had an expiration date far in the future, and two years later the underlying GameStop shares spiked in value, putting the options in-the-money, which the trader was able to exercise for $48 million. [...]"
https://en.wikipedia.org/wiki/Intrinsic_value_(finance)#Options
 
Another great story is the book The Predictors - now we're talking hundreds of millions of dollars.
 
ETJ said:
@FSU do you mean Continental Bank ? I don't recall a First Op story.
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First Options was owned by Continental Bank. The story I thought you may have been talking about was when a trader in 1987 (who cleared First Options, something Lee?) sold a boat load of puts in the OEX and almost took them both out.
 
First Op was sold to CB who owned it in 87. They bought it back post-crash. Splitting hairs, but FOC was still an ongoing business and reacquired the pieces from a CB post-crash. The issue wasn't solely the loss, but the Feds said they could hold equities in the error account. Best trade Larry Bloom ever made. The story is in Insana's book.
Here is an arcane piece of trivia - what clearing firm actually failed in 89 - the United crash?
 
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Such cases do happen.
1 out of 100 earns tons of $$$$$.

The rest ended up penniless, wife-less & worst life-less
 
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