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Someone in the options market knew a week ago that Ballmer was leaving

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  • User profile image
    SteveRichter

    http://www.zerohedge.com/news/2013-08-23/call-it-ballmer-game-who-knew-what-when

    As I am reading here http://en.wikipedia.org/wiki/Call_option a call is something you pay for today that gives you the right to buy a stock at a set price in the future. You are betting the stock price will rise.

     

  • User profile image
    Craig_​Matthews

    Before you get too far, I just want to point out that the same reasoning was used to spread the belief that stock brokers were complicit in the 9/11 attacks. A random stock or option purchase implies nothing by itself, regardless of events going on. 

    I'm sure people in the markets were betting the stock price will rise, and others were betting it will drop, just like every single other day where people are buying and selling options, whether there's a CEO retiring or not.

     

  • User profile image
    SteveRichter

    Not that I know what the chart means, but the bottom one shows minimal activity ( or price ) in June and July. Then a marked increase around Aug 8.  I for one do not think there is anything wrong with 95% of insider trading. Just interesting that some people knew the MSFT share price would rise on news Ballmer was leaving.

     

  • User profile image
    figuerres

    , SteveRichter wrote

    Not that I know what the chart means, but the bottom one shows minimal activity ( or price ) in June and July. Then a marked increase around Aug 8.  I for one do not think there is anything wrong with 95% of insider trading. Just interesting that some people knew the MSFT share price would rise on news Ballmer was leaving.

     

    or the same thing may have something to do with windows 8.1 ?  folks saying Hey they are making it better etc ...  or any of the other recent news on what MS has in the works ??

     

  • User profile image
    ScanIAm

    , SteveRichter wrote

    ...  I for one do not think there is anything wrong with 95% of insider trading. ... 

    OK, I'll bite, what kind of insider trading makes up 95% and isn't wrong?

  • User profile image
    cbae

    *snip*

    Just interesting that some people knew the MSFT share price would rise on news Ballmer was leaving.

    Stock prices generally go up whenever an embattled CEO announces his/her retirement or is fired. Regardless of what kind of position a trader takes on the bases of leaked insider information is (supposed to be) illegal. The kind of underhanded * that goes on in the securities markets is appalling. It's bad enough that the exchanges nowadays are like casinos, but in these casinos there's all kinds of card counting going on, and it's rare that anybody gets busted.

  • User profile image
    Blue Ink

    I'm not much into stock trading, but from what I see the MSFT stock had just taken a plunge a few days before the announcement and, according to that chart, the call option was also pretty cheap.

    Foul play is always a possibility, but I wouldn't exclude that it just looked like a reasonable bet to take.

     

     

  • User profile image
    SteveRichter

    , ScanIAm wrote

    *snip*

    OK, I'll bite, what kind of insider trading makes up 95% and isn't wrong?

    I was thinking insider trading by the CEO and other officers of the company should be illegal. But I have reconsidered. It should all be legal. Let the market price a companies willingness to be transparent and fair to all investors into its stock price. People certainly should invest in stocks, but over the long term. http://stockcharts.com/freecharts/historical/djia19802000.html  That negates any advantages of insider trading.  With all the ways to get information nowadays and the many sophisticated investors I don't see the gain from laws that are supposed to protect investors. Anything that lessens the power of central governments should be seriously considered.

     

     

  • User profile image
    Harlock123n​ew

    Come on now... Anybody who has been paying attention could see that a shakeup at the the top was coming at Microsoft. The company made public weeks ago that it was taking a 900 million hit on the surface RT debacle. Windows 8 market is disappointing (Though I personally like it as a desktop OS with some add-ins that bring stuff back). Other high ranking officials leaving or being pushed away. Its a matter of time before it went to the top. Insider info?... Please, just some folks being a little observant..

     

  • User profile image
    vesuvius

    @Harlock123new: The grooming process for Ray Ozzie started over 2 years before he took over. If you think someone running one of the largest companies in the world just resigns and destabilises a huge company the size of Microsoft that is wishful thinking.

  • User profile image
    Harlock123n​ew

    The statement was that someone on the inside lets some investors on the outside know that Ballmer was exiting... I just believe that the outside person/ investment firm was just paying attention and got a nice little bump in their recently purchased stock options. Simply by reading the tea leaves as it were. Nothing more than being observant..

    Nothing about stability, or future performance of the company or anything like that... All that remains to be seen.... I am hopeful but not holding my breath....

     

     

     

  • User profile image
    ScanIAm

    , SteveRichter wrote

    *snip*

    I was thinking insider trading by the CEO and other officers of the company should be illegal. But I have reconsidered. It should all be legal. Let the market price a companies willingness to be transparent and fair to all investors into its stock price. People certainly should invest in stocks, but over the long term. http://stockcharts.com/freecharts/historical/djia19802000.html  That negates any advantages of insider trading.  With all the ways to get information nowadays and the many sophisticated investors I don't see the gain from laws that are supposed to protect investors. Anything that lessens the power of central governments should be seriously considered.

     

    I just don't agree.  This sounds eerily similar to the libertarian ideal that we should just leave businesses alone and let those that poison their customers fail.  It seems to imply that a certain amount of poisoning will have to happen.

    Same with insider trading.  If you know that Windows 8.2 will cause the deaths of untold millions of babies, you can short shares or sell your stake before the baby killing commences.  Meanwhile, millions of unsuspecting investors either directly or indirectly (via funds in 401(k)) will be robbed.  Again, a certain amount of poison is required for your scheme to function.

    I'm a big fan of avoiding poison in the first place.

  • User profile image
    cbae

    , SteveRichter wrote

    *snip*

    I was thinking insider trading by the CEO and other officers of the company should be illegal. But I have reconsidered. It should all be legal. Let the market price a companies willingness to be transparent and fair to all investors into its stock price. People certainly should invest in stocks, but over the long term. http://stockcharts.com/freecharts/historical/djia19802000.html  That negates any advantages of insider trading.  With all the ways to get information nowadays and the many sophisticated investors I don't see the gain from laws that are supposed to protect investors.

    Why stop there? You might as well do away with the SEC altogether. Why even make companies report earnings? When companies shutter their doors because they go BK, the market will adjust the stock price accordingly. There's no need for shareholders to know that the business is starting to swirl around the toilet bowl. They'll know soon enough when the company's been completely flushed down.

    Anything that lessens the power of central governments should be seriously considered.

    It's not about power. It's about having somebody maintain the public trust through enforcement. The instant you make insider trading legal, you'll see trillions of dollars pouring out of equities markets. Equities trading simply can't exist under those circumstances. This is seriously one of the most absurd positions I've seen anybody take. Would you really put your money into the stock market if insider trading were legal? I'd sooner put my money under my mattress.

  • User profile image
    SteveRichter

    , cbae wrote

    Why stop there? You might as well do away with the SEC altogether. Why even make companies report earnings? When companies shutter their doors because they go BK, the market will adjust the stock price accordingly. There's no need for shareholders to know that the business is starting to swirl around the toilet bowl. They'll know soon enough when the company's been completely flushed down.

    So do not buy stock in such a company. Only invest in companies that are certified by a reputable oversight company to consistently disclose all the info you as an investor would like to know. No need for the SEC and criminal prosecution. If the corporation you invest in violates its disclosure agreements to its investors the investors can sue in civil court.

     

  • User profile image
    SteveRichter

    , ScanIAm wrote

    *snip*

    If you know that Windows 8.2 will cause the deaths of untold millions of babies, you can short shares or sell your stake before the baby killing commences. 

     

    In this case the public would be alerted to the serious problems in the product by the sudden movement in the stock price. Getting the news via the indirect route of the short seller would likely be the quickest way for the public to be informed.

     

  • User profile image
    cbae

    , SteveRichter wrote

    *snip*

    So do not buy stock in such a company. Only invest in companies that are certified by a reputable oversight company to consistently disclose all the info you as an investor would like to know. No need for the SEC and criminal prosecution. If the corporation you invest in violates its disclosure agreements to its investors the investors can sue in civil court.

    That * wouldn't fly. You're living in Delululand if you think such a market could even exist.

  • User profile image
    cbae

    , SteveRichter wrote

    *snip*

    In this case the public would be alerted to the serious problems in the product by the sudden movement in the stock price. Getting the news via the indirect route of the short seller would likely be the quickest way for the public to be informed.

    Aside satisfying your dogmatic belief about the role "central government", what benefit is there to be gained by legalizing insider trading (never minding the absurdity of the notion to begin with)?

     

  • User profile image
    SteveRichter

    , cbae wrote

    *snip*

    That * wouldn't fly. You're living in Delululand if you think such a market could even exist.

    It is so clear to you yet you don't give a reason.

     

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