Update! More details on "Betting on a collapse" insider trading:
WARNING: The following is not a recommendation to buy, sell or hold any financial instrument.
Let's take a look at the out of the money option bets on the Diamonds, the ETF that tracks the Dow Jones Industrial Average. Why use the out of the money numbers? Because that's where the criminals would make the most money on an October surprise.
From today's option action on DIAMONDS Trust, Series 1 (DIA):
Open Interest in Out of the Money PUT OPTIONS, Expire at Close Fri, Oct 20, 2006:
189295
Open Interest in Out of the Money CALL OPTIONS, Expire at Close Fri, Oct 20, 2006:
15842
189295 puts / 15842 calls = 11.95 times more puts vs. calls.
So, on this historic day, with the triumphant Dow "soaring" to a glorious, record high, the amount of money being placed on very speculative bets that the Dow is going to decline substantially by October 20 is nearly 12 times the amount of money being bet that the Dow will rise substantially by October 20.
In case you're interested, total open interest on DIA is calls 87908 vs puts 197303 or 2.24 times more puts vs. calls.
Hmm. That's interesting no matter how you slice it. I might just have to keep track of this over time. Anyone know of some free method of charting an out of the money put / call ratio? Doing it manually is a bit of a pain. I managed to get Open Office Calc to parse the DIA data tables right out of Yahoo, then I do a sumif on column Last < 1, add column Open Int. Doing this on both calls and puts gives me the out of the money open interest on each. Now, if I could somehow automatically store the results from these sumifs on different rows each day... I'll just copy and paste them for now.