Wednesday, September 28, 2011

Index Options Predict October Stock Collapse

(I hesitate to whole-heartedly agree with the conclusion of this analysis . . . the main reason . . . being that it seems historically that the market-manipulators "usually" trap the biggest open-interest option players in worthless options, if possible . . . the crux of the matter depends on whether the same manipulators are also the option holders, which is very possible . . . when the whole world seems to "know" something, the opposite usually happens . . . on the other hand, one would not have to risk the farm to try to participate with the Put buyers in the possible crash . . .)

Paul Drockton

Index Options allow the investor to bet for or against an entire Stock Index. For example, an S&P 500 Index Option is a bet that all 500 companies that make up the S&P 500 will go up or down. As I have stated before, money doesn't disappear from the stock market, it simply changes hands. The stock market is simply a barrel of money and Put Options are the cork in the bottom of the barrel.

Much has been written about the sale of Put Options against American Airlines prior to 911. That, my friends, is chump change when compared with the amount of money made with S&P Index Options as a result of the market collapse that followed 911. Volume in Index Options actually doubled in the months leading up to 911 from the previous year.

Now we have an even more dramatic scenario unfolding

1. Open Interest (which indicates a desire to Buy or Sell Index Options) normally stands at a few hundred contracts on any expiration date. A Contract must be created in order for it to be considered an Open Interest.

2. As of 9/19/11, the S&P 500 stood at 1204. Their are three types of Put Options, "At the Money" (strike price is 1204), "In the money" (strike price is above 1204), or "Out of the Money" (strike price below 1204).

3. A 1204 Strike price, October Option cost $4,000. A 1310 Strike Price is now valued at $17,000. That means with a 105 point drop in the S&P 500, the average Index Option increases 400% in value.

4. Remember, Open Interest on Put Options normally stands at less than 1,000 Contracts. Here is what October Put Options that Bet Against the S&P 500 look like for October, 2011:

Open Interest: Strike Price:

12,467 500
17,893 650
67,816 750
116,406 800
51,789 850
27,742 875
64,123 900
20,392 925
52,737 950
26,701 975
90,031 1,000
117,902 1,100
127,798 1,150
127,036 1,200

TOTAL: 919,000 Contracts (Source)

Normal Open Interest: 14,000 Contracts or less.....

Difference: 900,000 more Put Options Than Normal

This means that for every 100 points the S&P drops in October, about 18.4 billion dollars will change hands. If the S&P loses 1,000 points, 184 billion dollars will change hands.

I say change hands, from the seller of the Put Option, which would be a Mutual Fund that is Indexed to the S&P 500, to the Buyer of the Put Option, which will be the Illuminati Banksters, Hedge Funds, etc... looking to steal your money. All they need is the right excuse to start selling into the market and/or dumping shares of those companies that make up the S&P 500.

The above gains do not include the trillions of dollars made by those that are holding Put Options on the large cap companies that make up the S&P 500. Companies like Google, which is now trading at $553.00 per share, and has a market capitalization of over 178 billion dollars. In fact, the total S&P 500 has a market capitalization of over 4.83 trillion dollars.

"According to Standard & Poor’s, the S&P 500 Index represents 75% of the U.S. equities and may be considered a proxy for the overall market. Stocks that make it into the S&P 500 index must be U.S.-based (determined by the “plurality” of revenue and assets), liquid, trade on a major U.S. exchange and have at least a $4b market cap." (Source)

If you are not out of the stock market yet, you need to be. As usual, the only investment at present that is not losing money and will grow exponentially is gold and silver. Gold is up 600% from 2000 and Silver is up 1000%.

Insider Trading Predicts October Crash

Paul Drocton

In order for the Illuminati Ponzi Scheme to work, those that own shares of individual companies that make up the S&P 500 have to start selling them into the market. As they accelerate their selling, owners of Put Options against those same companies will start raking in the dough.

Remember that the Kennedy Fortune did not come from bootlegging, it came from Put Options and the 1929 Stock Market Collapse.

Just another way to plunder the American populace of its hard-earned savings and retirement. This just in:

"Chief executives. Board members.

The head honchos. The people who know.

Just a few weeks ago, they were out in force, buying up shares in their own companies with both hands.

No longer. They’ve disappeared. Almost overnight.

“They’ve stopped buying,” says Charles Biderman, the chief executive of stock market research firm TrimTabs, which tracks the data. “Insiders aren’t buying this rally.”

Insider stock purchases, which surged above $100 million a day in the market slump last month, have now collapsed to just $13 million a day." (Source)

It gets worse....

Meanwhile the ratio of insider sales to purchases has skyrocketed. Today insiders are dumping $7 in stock for each $1 that (other) insiders are buying. That’s a worrying ratio. Six weeks ago the amounts of purchases and sales were about equal.

It’s the kind of news that should give investors pause.

What insiders do with their own money is one of the stock market’s best barometers.

After all, who better than company executives know their own order books? Who knows the conditions in their industry better? (Ibid)

I project that we could see as much as an 80-90% correction in the stock market in the next month or so, based on the incredible number of Put Options that have been created against the October, 2011 S&P 500, and, the history of the Pirates and Thieves that have stolen everything else from us.

This will be followed by higher interest rates (double-digit?) and a collapse of the bond market as well. If you own a 401K or massive financial holdings, moving everything into a money market account, which will respond more favorably to higher interest rates, and out of the stock market, is a band-aid fix, but better than just giving them all of your hard-earned savings.

Money markets buy debt that matures in the next three-nine months.

The bond market collapse, higher interest rates, and a devalued dollar will ultimately destroy everything from CDs to Municipal Bonds. Inflation and hyper-inflation will kick in and commodities will shoot through the roof.

The problem is, the commodity market is also on the verge of catastrophe. Selling Futures on hard commodities in an inflationary market makes no sense whatsoever to a farmer or mine owner. They will opt for selling what they can at the rising market prices. The other problem with Futures in an inflationary economy is that being on the wrong end of a contract has bankrupted billionaires, so, getting paid could be the real issue.

Once again, we get down to buying all the food you can store at current market prices, heirloom seeds to replace the food you eat from your storage etc. The rest should go into precious metals.


The Black Sheep tries to warn its friends with the truth it has seen, unfortunately herd mentality kicks in for the Sheeple, and they run in fear from the black sheep and keep to the safety of their flock.

Having tried to no avail to awaken his peers, the Black Sheep have no other choice but to unite with each other and escape the impending doom.

What color Sheep are you?