What can I do about insider trading activity in stock options that cause financial harm?

[zdreg]

Nothing like that at all. Someone has to be willing to sell, or else the buyer can't buy (at least not at their bid). Sometimes the bid is out there all day. I'm not shy about selling contracts for even a penny or two. They accomplish what they needed...to get out of their contracts...and I earn a token amount.

to think that you can outperform the market makers on the floor is ....... ..
fill in the blank.

to answer your original question what can i do about insider trading?
the answer is nothing. to top it off you have no proof. there is activity surveillance at every exchange. let them do their job and you use your time more constructively.

 

[ktm]

It may have been Jesse Livermore that said "when the school marm starts dancing on the table, it's time to leave the bar".

To me, watching someone super aggressively buying DOTM options is that school marm.

 

[Martinghoul]

Isn't this "possible insider trading" one of the risks that you face when you sell short-dated OTM options? When picking pennies in front of the steamroller, you shouldn't be too surprised when occasionally you get flattened, no?

Realistically, the issue is that it will probably be difficult to prove that the buyer acted on the basis of non-public info. You can certainly attempt to allege improper behaviour and report the particular pattern of trading to the SEC/others (in fact, it may be your duty to do so). However, given everything, it's unlikely to be of much help to you, so it might not be worth investing too much time in it. Just my $Z2c...

 

[ironchef]

As with anything else, you have to know what you're doing, and it requires a lot of time and a lot of capital. Each trade is a small gain, and the tax return is very thick. I enjoy it, but it's not for everyone. One bad trade can wipe out week's of good ones. And, as you can see by this thread, you can be sharp and experienced and still get burned. If someone has access to information, and worse, privileged information, and you don't, you will run into problems.

The old saying is very true here: It works until it doesn't. I'm holding the bag on stocks in my portfolio that were assigned to me years ago.

Thank you for sharing your insights.

And good luck to you.

 

[ironchef]

As with anything else, you have to know what you're doing, and it requires a lot of time and a lot of capital. Each trade is a small gain, and the tax return is very thick. I enjoy it, but it's not for everyone. One bad trade can wipe out week's of good ones. And, as you can see by this thread, you can be sharp and experienced and still get burned. If someone has access to information, and worse, privileged information, and you don't, you will run into problems.

The old saying is very true here: It works until it doesn't. I'm holding the bag on stocks in my portfolio that were assigned to me years ago.

Also, it looks like there is more than one way to skin a cat: Nassim Taleb, the author of Black Swan, often took the opposite side of your trade. He advocated taking regular small losses and when a black swan hit, he got big payoffs. He claimed he made enough to be very wealthy.

 

[zdreg]

He claimed he made enough to be very wealthy.

I don't know if his wealth comment is true. however, he has turned himself successfully into a cult figure. he has co-ed groupies (attractive ones)who follow him on his lecture tours

 

[lawrence-lugar]

The option gained 3300% overnight. I'm one of many harmed by selling those illegally profitable contracts

That's Big -- i bet you wish you took the other side of that trade instead

 

[joezapp]

Regardless of whether it was insider trading or not, you can't defend your loss because you are perfectly content running a leptokurtic operation. There is nothing wrong with that, but if you understood the risk, you wouldn't be complaining.

I think all the time you would waste with the SEC would be better spent on improving your trading, or spending time with your wife, kids, family, whatever.

Ummmm...did you see that I'm doing this a long time, I do it for a living, and that I'm very successful with it? I guess not. I could teach you how to improve YOU'RE trading! I just came on here to get insight on regulatory process. Thanks for nothing, though...

 

[joezapp]

That's Big -- i bet you wish you took the other side of that trade instead

Good one, Lawrence! It never works out that way, though, does it? LOL

 

[joezapp]

to think that you can outperform the market makers on the floor is ....... ..
fill in the blank.

to answer your original question what can i do about insider trading?
the answer is nothing. to top it off you have no proof. there is activity surveillance at every exchange. let them do their job and you use your time more constructively.

To the first part...I don't really know what you're trying to say. Not that it matters, lol. I do know that I've been doing this for a long time, it's what I do for a living, and the brokerage account balance looks terrific. As for the second part, I agree it's likely that nothing gets done. Nothing wrong with learning about the process and possibly getting the criminals shaking in their boots, though...if time permits, agreed.