...and with this definitive explanation hopefully we can put the issue -- and Judy -- to rest.
Permanently. --- In FairfieldLife@yahoogroups.com, anony_sleuth_ff <[EMAIL PROTECTED]> wrote: > > http://www.snopes.com/rumors/putcall.asp > > Claim: In the days just prior to the 11 September 2001, large > quantities of stock in United and American Airlines were traded by > persons with foreknowledge of the upcoming 9/11 attacks. > > Status: False. > > Origins: On 11 September 2001, four planes were hijacked and used in > the Attack on America: American Airlines Flight 11 leaving Boston > bound for Los Angeles, American Airlines Flight 77 leaving Washington > bound for Los Angeles, United Airlines Flight 175 leaving Boston bound > for Los Angeles, and United Airlines Flight 93 leaving Newark bound > for San Francisco. Each of these planes was deliberately crashed, > killing all on board two into the World Trade Center towers, one > into the Pentagon, and one into a field in Pennsylvania. (Only the > delay in takeoff of UA Flight 93 and the actions of the alerted > passengers on board prevented it from becoming yet another instrument > of destruction resulting in an even greater loss of life.) > > The operation had taken years to plan, and the perpetrators knew well > in advance which airlines would be affected. > > In the month prior to the 11 September 2001 attacks on the World Trade > Center and the Pentagon, unusual trading activity involving American > and United Airlines stock was noted by market analysts who at the time > had no idea what to make of it. Wildly unusual discrepancies in the > put and call ratio 25 to 100 times normal were reportedly observed > in stock options of the two airlines. In one case, Bloomberg's Trade > Book electronic trading system identified option volume in UAL (parent > of United Airlines) on 16 August 2001 that was 36 times higher than usual. > > (Options are wagers that the price of a 100-share block of a > particular stock will rise or fall by a certain date. "Puts" are > "shorts" bets the stock price will fall. "Calls" are bets the price > will rise. Thus, one who has reason to believe a particular company is > about to suffer a terrible reversal of fortune would purchase "puts" > against that entity's stock.) > > But it was during the final few trading days (the market closes on > weekends) that the most unusual variances in activity occurred. > Bloomberg data showed that on 6 September 2001, the Thursday before > that black Tuesday, put-option volume in UAL stock was nearly 100 > times higher than normal: 2,000 options versus 27 on the previous day. > > On 6 and 7 September 2001, the Chicago Board Options Exchange handled > 4,744 put options for United Airlines' stock, translating into 474,000 > shares, compared with just 396 call options, or 39,600 shares. On a > day that the put-to-call ratio would normally have been expected to be > roughly 1:1 (no negative news stories about United had broken), it was > instead 12:1. > > On 10 September 2001, another uneventful news day, American Airlines' > option volume was 4,516 puts and 748 calls, a ratio of 6:1 on yet > another day when by rights these options should have been trading > even. No other airline stocks were affected; only United and American > were shorted in this fashion. > > Accelerated investments speculating a downturn in the value of Morgan > Stanley and Merrill Lynch (two New York investment firms severely > damaged by the World Trade Center attack) were also observed. > > The National Commission on Terrorist Attacks Upon the United States > (also known as the "9/11 Commission") investigated these rumors and > found that although some unusual (and initially seemingly suspicious) > trading activity did occur in the days prior to September 11, it was > all coincidentally innocuous and not the result of insider trading by > parties with foreknowledge of the 9/11 attacks: > Highly publicized allegations of insider trading in advance of 9/11 > generally rest on reports of unusual pre-9/11 trading activity in > companies whose stock plummeted after the attacks. Some unusual > trading did in fact occur, but each such trade proved to have an > innocuous explanation. For example, the volume of put options > instruments that pay off only when a stock drops in price surged in > the parent companies of United Airlines on September 6 and American > Airlines on September 10 highly suspicious trading on its face. Yet, > further investigation has revealed that the trading had no connection > with 9/11. A single U.S.-based institutional investor with no > conceivable ties to al Qaeda purchased 95 percent of the UAL puts on > September 6 as part of a trading strategy that also included buying > 115,000 shares of American on September 10. Similarly, much of the > seemingly suspicious trading in American on September 10 was traced to > a specific U.S.-based options trading newsletter, faxed to its > subscribers on Sunday, September 9, which recommended these trades. > The SEC and FBI, aided by other agencies and the securities industry, > devoted enormous resources to investigating this issue, including > securing the cooperation of many foreign governments. These > investigators have found that the apparently suspicious consistently > proved innocuous. > Last updated: 11 December 2005 > > The URL for this page is http://www.snopes.com/rumors/putcall.asp > > Urban Legends Reference Pages © 1995-2006 > by Barbara and David P. Mikkelson > This material may not be reproduced without permission. > Sources Sources: > > Carpenter, Dave. "Option Exchange Probing Reports of Unusual > Trading Before Attacks." > The Associated Press. 18 September 2001. > > Schoolman, Judith. "Probe of Wild Market Swings in Terror- Tied > Stocks." > [New York] Daily News. 20 September 2001 (p. 6). > > Toedtman, James and Charles Zehren. "Profiting from Terror?" > Newsday. 19 September 2001 (p. W39). > To subscribe, send a message to: [EMAIL PROTECTED] Or go to: http://groups.yahoo.com/group/FairfieldLife/ and click 'Join This Group!' Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/FairfieldLife/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/