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Can You Make a Million Bucks in Less than an hour!

Discussion in 'Shares' started by Tropo, 17th Aug, 2007.

  1. Tropo

    Tropo Well-Known Member

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    The Expiring Option Exercise Manipulation Game...Or; How Stacking the Deck on the CBOE and Loading the Dice on the NYSE

    Can You Make a Million Bucks in Less than an hour!

    One of the best ways to make a lot of money during option expiration week happens in the last hour of trading on Thursday afternoon, AND the first 15 minutes of trading on Friday morning. It is a relatively easy seven step process as follows:

    First you start buying a few thousand "IN THE MONEY" calls on the OEX and/or SPX on the CBOE as quietly as you can around 2:20 Chicago Time. It helps if the spoos are dropping so you can slowly pick them up real cheap and, on most Thursdays about then, they are dropping about 75% of the time.

    Second you start buying big blocks of the top OEX and SPX stocks on the NYSE around 2:40 (do not use the third market). That's XOM, GE, C, BAC, PG, PFE, JNJ, AIG, JPM, MO, CVX, IBM, WMT, and WFC in that order. Make sure the dollar amount of stocks that you are buying closely matches the total number of option contracts that you picked up earlier. Also, it helps to throw in a few big orders for GS, LEH, CI, FDX, BDK, and BA too since they are big stocks and can move fast. The crowd on the NYSE really wakes up and takes notice when you use them too. Your move will pop the OEX about 1 point. If you have Level II, you can start buying the offers on MSFT, CSCO, and INTC at 2:41 too. That wakes up the Level III crowd.

    Then you wait about 6 or 7 minutes for the ripple effect to hit. Hopefully your move will panic the short day traders, making them cover before the close (because it can trap them with margin calls in about 11 minutes if they don't cover). They almost always panic and cover with "AT THE MARKET" orders. And about the time the specialists are starting to run out of stocks. The shorts will pop the OEX about 1 point. And then a buying panic, three to five minutes before the close catches the specialists without any stock to sell and that pops the OEX another point for a total of about three points in 20 minutes. And the OEX usually goes out on the high of the day, with the tape running a little late. Pretty neat huh?

    Third, you buy a few thousand of "IN THE MONEY" puts on the OEX and/or SPX from 3:09 into close. Since the OEX went out on or near the high of the day, you'll usually pick most of them up hitting the lowest offer of the day. Make sure the total number that you pick up matches the dollar amount of stocks that you are holding long.

    Fourth, starting at 3:16 you send notices to all of the clearing firms on all of the CALLS that you hold to EXERCISE them that night, thereby locking in your profit on all of your calls (the OEX went out on the high remember). Then you break out the champagne knowing you have probably just picked up about a half million bucks.

    Fifth, on Friday morning at 8:31 you start selling all of the stocks you bought on Thursday afternoon. This usually starts a panic and everyone starts dumping those stocks. And the day traders start shorting too with no bids in sight. This usually drops the OEX about two points (and not the three that you ran it up the night before) because there is always some buying after the opening for option expiration to slow down the mini-crash.

    Sixth, you sell all of your PUTS (now a little deeper in the money) on the CBOE and go flat in all of your accounts (stock and options) knowing you have now made another half million bucks or so.

    Seventh, you leave for the weekend (and the following week too) in the Lear to Orient Beach in St. Martin, drinking Dom in the Rolls on the way to the airport.

    That's it. An easy seven step process. Only six if you leave out the vacation

    :D
     
  2. Simon

    Simon Well-Known Member

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    Why didn't you post this yesterday? Now I have to wait a whole week.
     
  3. crc_error

    crc_error The Rule of 72

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    Nice one! I'll try that next week!
     
  4. coopranos

    coopranos Well-Known Member

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    Come on Tropo, you of all people should know that you should only trade a system as it was designed to be traded - you leave out the vacation and chances are your results will be significantly different!
     
  5. Tropo

    Tropo Well-Known Member

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    That is why going for vacation I always exit the market...:D
     
  6. Sweet

    Sweet Member

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    So i totally dont get most of the codes being quoted in the article? Whats CBOE? Im guessing its a US market but I am stumped.

    Ull prob laugh at me now but i gotta start somewhere!
     
  7. Tropo

    Tropo Well-Known Member

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    Chicago Board Options Exchange.

    I do not laugh. I am still learning myself.;)
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I always say that anyone who is no longer learning, must actually be dead.
     
  9. Tropo

    Tropo Well-Known Member

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    Absolutely! :D
     
  10. Sweet

    Sweet Member

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    Thanks! So did this strategy work and if so r u living it up like diddy?
     
  11. Tropo

    Tropo Well-Known Member

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    Works...for some people.:p