Cramer- "Puts on Ice"
Enviado: 12/5/2003 18:31"Puts on Ice"
By James J. Cramer
05/12/2003 01:23 PM EDT
Click here for more stories by James J. Cramer
Last Thursday, with the market looking like it was about to totter into oblivion, a large hedge fund saved the day.
Oh, the fund didn't know it was saving the day. In fact, it was just the opposite. The fund came in and bought a massive amount of puts on lots of different S&P names. It looks like, in retrospect, some firm figured that the whole shooting match was going to roll over and it just had to get the puts on to make back whatever he might have lost or sat out during the big run we have had so far.
The put buying was unwieldy and loud. I heard it all the way down in Miami. The size of the positions made it so that if the market didn't go right down, the buyer would be hung because a bunch of hedge funds immediately played "me too" and bought more of the puts.
Then, that night Intel said things were better, not worse. And Comcast reported that thing of beauty number that re-ignited broadband. The result? We got a spike up and the put buyers were impaled. They could either blow the puts out or buy common against them. It looks like they have done a little bit of both.
The result: What you see on your screen. Saved by the bears... again. "
(in www.realmoney.com)
By James J. Cramer
05/12/2003 01:23 PM EDT
Click here for more stories by James J. Cramer
Last Thursday, with the market looking like it was about to totter into oblivion, a large hedge fund saved the day.
Oh, the fund didn't know it was saving the day. In fact, it was just the opposite. The fund came in and bought a massive amount of puts on lots of different S&P names. It looks like, in retrospect, some firm figured that the whole shooting match was going to roll over and it just had to get the puts on to make back whatever he might have lost or sat out during the big run we have had so far.
The put buying was unwieldy and loud. I heard it all the way down in Miami. The size of the positions made it so that if the market didn't go right down, the buyer would be hung because a bunch of hedge funds immediately played "me too" and bought more of the puts.
Then, that night Intel said things were better, not worse. And Comcast reported that thing of beauty number that re-ignited broadband. The result? We got a spike up and the put buyers were impaled. They could either blow the puts out or buy common against them. It looks like they have done a little bit of both.
The result: What you see on your screen. Saved by the bears... again. "
(in www.realmoney.com)