The Pre Market Tape

[bam]

Sorry if this was covered elsewhere, but how exactly do we know the CA's are still in place? And do we know if it is some standard amount of time that they remain valid after a deal (i.e., even if this were the final deal would they really be released from CA's the instant a deal is done, or do they have to wait a few weeks anyway?) Thanks.

[CesiumFormate]

Per Mr Bumble ,our new London poster. Over 70,000 option contracts were traded on Friday That's manipulation Second over 1.1 million more shares were shorted Friday That's manipulation If Mr Bumble knows this then IOC knows this. If IOC what would you do???? Nada is not possible Something is possible. Would you get the details of the deal out quickly.?? Would you burn the shorts???

I went back and looked at the charts back to early February.  Each time we have had a major short manipulation we have recovered in no more than three days.  It makes no sense to short this stock unless you are using the money to buy call options.  There aparantly enough calls purchased to do this.  One example showing the demand.  June $115 calls closed Thurdsay at $0.84 when the stock was at $93.  These calls were selling for over $3 when the price was tanking down to $85.  They closed at $1.02 with the overall stock down 7.07.

What I can't explain is why the put/ratio of the options traded was over two.  This happened in the last big raid in early March as well.  Why are there so many puts trading? I am assuming out of the money puts are being sold that are likely to expire.

So the strategy I thing the shorts are using knowing the stock is likely of higher value is,

1.  Sell and leverage by buying long calls.

2.  Sell out of the money naked puts that are likely to expire.  Potentially buy calls at a lower share ratio.  One call for two puts sold for example.

I would appreciate it if anyone else can shed some light on the trading strategy of the shorts. I am not an options trader.  I am just trying to understand this intellectually.

CF

[jft310]

I am an option trader. We sell deep in the money puts and buy in the money calls with their money. We sell the spikes,cover the puts , sell the calls. Works fairly well, not perfect. Do lose at times . Currently we are short June $85 puts and Long June $80 calls. The Sept $105 calls were very tempting Friday but we couldn't execute at our price. This is not margin we carry cash and its a very modest position. Serious fun we call it vs betting the farm for a home run.

[trans]

Per Mr Bumble ,our new London poster. Over 70,000 option contracts were traded on Friday That's manipulation Second over 1.1 million more shares were shorted Friday That's manipulation If Mr Bumble knows this then IOC knows this. If IOC what would you do???? Nada is not possible Something is possible. Would you get the details of the deal out quickly.?? Would you burn the shorts???

I went back and looked at the charts back to early February.  Each time we have had a major short manipulation we have recovered in no more than three days.  It makes no sense to short this stock unless you are using the money to buy call options.  There aparantly enough calls purchased to do this.  One example showing the demand.  June $115 calls closed Thurdsay at $0.84 when the stock was at $93.  These calls were selling for over $3 when the price was tanking down to $85.  They closed at $1.02 with the overall stock down 7.07.

What I can't explain is why the put/ratio of the options traded was over two.  This happened in the last big raid in early March as well.  Why are there so many puts trading? I am assuming out of the money puts are being sold that are likely to expire.

So the strategy I thing the shorts are using knowing the stock is likely of higher value is,

1.  Sell and leverage by buying long calls.

2.  Sell out of the money naked puts that are likely to expire.  Potentially buy calls at a lower share ratio.  One call for two puts sold for example.

I would appreciate it if anyone else can shed some light on the trading strategy of the shorts. I am not an options trader.  I am just trying to understand this intellectually.

CF

Lets look at Friday trade data:

1.   24,567 calls and 52,749 puts traded 5/24 total option volume. These numbers are quite enoug to totally overwhelm the trading of the common stock of IOC (3.3 million common vol.).  That is equivalent to almost 8 milliion shares of common.   Breaking down the reported short  volume and total reported sell volume reveals a highly unusual situation for IOC where the June put open interest is larger than the call open interest (approx 37,800 coi vs. 42,000 poi).  Ditto for the September expiration (10,000 coi vs. 12,700 poi).  This is very rare or almost unheard of vs.  normal open interest distributions where COI usually dominates.  Usually COI runs roughly 1.5 times POI on a typical stock.   This suggests something very different is happening in the activity of IOC shares.  Also, The majority of the option activity was in the June and July contracts, then dropped off sharply after that.

2  This is likely explained by the very tight stock loan situation in IOC, so the large short interest is using puts instead of shorting common, or other option transactions to do a raid like this.  Buy puts and/or sell calls etc..

3. Why are they doing this?  To me, again just my reasoning, since they have limited stock loan available, they can accomplish the same by  FORCING the marketmakers, with their allowed short sale exemptions, to do the selling for the  shorts with their delta hedges of the shorts transactions.  an example:  shorts buy puts, marketmaker sells puts to short, marketmaker delta hedges his risk in position by buying puts or selling common stock.  there are other variation that accomplish similar.  What this does is noticeably increase the naked shorting , on a temporary but compressed basis.  Our big long holders are usually far more stable holders.  They don't trade like a short hedgie.  The short hedgie, using collaboration with other buddie hedgies, are able to throw extreme sellling pressure at a stock on a very short term basis, especially using dark pools.  It, imo, amounts to blatant manipulation that can totally detach a stock from its underlying fundamentals on a short term basis.  imo, that's what happened Friday, an orchestrated big short attack.

4.  What we also don't stop to examine is that in the past 5 years, there are 8 sharp spikes higher (daily) that all are then followed by a short attack that creates a downdraft in the stock on a short term basis.  Some of our big shorts are deliberately contributing to the spikes higher, or creating them, followed by shorting them heavily to drop the stock price.  Friday this extreme short attack, imo, produced a 20 point downfraft.  Use a daily chart, and go back 5 years and you see 8 clear spikes higher followed by short attacks.  This spike short selling is a favorite tool by our big shorts, imo when they can get away with it. They start by helping create it.then short it aggressively.

5. I have observed through the years on many stocks, that the toughest short attacks on a heavily shorted stock comes right before big news. These criminals are not used to losing, and that's why they collude with others to get enough firepower to make sure they don't lose.  Most often they control these heavily shorted stock, but when they lose, they usually lose big.

6. Hope this adds a little color to what's going on with IOC.  It has happened before.  I can look back now and see highs to lows of 24,26,27,25,and 23 point short raids that have nothing to do with the developing fundamentals of this stock.  I think regardless of what the big shorts try, this stock is going higher and should start not far off.

all fwiw

[Palm]

Thanks Trans and others. You would think that this obvious stock manipulation would catch the attention of regulators. It's probably worth reporting now that is has been so blatantly carried out on 5/24. Has anyone thought of reporting this?

[jft310]

Thanks Trans!!

[admin]

Thanks Trans and others. You would think that this obvious stock manipulation would catch the attention of regulators. It's probably worth reporting now that is has been so blatantly carried out on 5/24. Has anyone thought of reporting this?

Somebody here posted an increased Failes to Deliver count.... from the SEC's own website, so don't hold your breath. I assume it's also not illegal to buy put options in large quantities, but I suppose it doesn't do any harm reporting

[Palm]

Agree. The as interesting thing to me is that all of this happened on a Friday. From several reports this was not something they were ready to do a PR on. Why on Friday did this all happen. One has to wonder how different this would have been had the proper PR been done on M-Th.

All smells to high heaven to me.

[Spartina]

Thanks trans, man this does get complicated. Anyone know why they have not listed on the Singapore stock exchange ? Would this create some stability/accountability ? Is it that complicated a process to do this, maybe they are waiting for a better time?

[trans]

I believe the big shorts have had a gameplan in place in case of deal news. When the day started out blowing out the tops, they were also forced to put the attack plan into action prematurely. Why? IOC was blowing through just about all technical screens on the globe if it were to continue. So, we got the mother attack button pushed. Especially when they realized they could distort the premature news releases. Ultimately, I believe they (shorts) used up some of their firepower, although if no news very soon, they'll harass it a bit lower still. However, that should be a big bottom, like all 8 others.....fwiw