Bin Laden shorting reinsurers...

[On-top]

I heard it on FinanceVision that Bin Laden, or one of his groups, had shorted several of the major reinsurers through UK banks during the attack.

Had anyone seen any other reports on this? I'm interested on how much they're going to be able to track.

[dustin]

I heard from someone that they did it through options, not from simply shorting the stock, which gives you absolutely huge returns. 10% drop = about 300% return. Thru buying puts/writing calls.. figure I heard was something like 50 million profit.

[Sjayne]

I read something on this yesterday..will see if I can dig it out. There was something about a German insurance company.

Also, something about airline stocks ..want to find it before I say a wrong name.

[Mikey]

Yeah, I've been following those stories. Here are a few:
http://www.reuters.com/news_article.jhtml;jsessionid=A4OLC1BGHXYNSCRBAEZS FFAKEEATIIWD?type=topnews&StoryID=235254
http://www.latimes.com/news/nationwo...1trading.story

Got this info of my bloomberg terminal on a story about the probes:

One day before two American Airlines jets were hijacked and
crashed, 1,535 contracts changed hands on options that let
investors profit if AMR stock falls below $30 per share before
Oct. 20. That was more than 60 times the previous daily average,
and five times the total of all October $30 put options traded
before Sept. 10, according to a Bloomberg analysis of options
market data. AMR shares rose $2.01 in midafternoon trading to
$20.01, after falling $11.70 yesterday to $18.


Those 1,535 contracts were worth $1.6 million at yesterday's
closing price compared with $337,700 at the end of trading on
Sept. 10, according to Bloomberg data. A contract represents
options for 100 shares.
Similarly, October $30 put options for UAL soared, with 2,000
contracts traded on Sept. 6, three trading days before the attack.
That was 285 times the previous average trading, and almost 75
times the total number of those options traded up to that time.
The 2,000 contracts were valued at $2.4 million yesterday,
compared with $180,000 on Sept. 6.

and

At Morgan Stanley, trading in October $45 put options jumped
to 2,157 contracts traded between Sept. 6 and Sept. 10, almost 27
times a previous daily average of 27 contracts. Morgan Stanley
shares fell 25 cents to $42.25 after dropping $6.40 to $42.50
yesterday.
Other brokerage and insurance companies where options trading
surged include:
-- Citigroup Inc., which has estimated that its Travelers
insurance unit may pay $500 million in claims from the World Trade
Center attack. It had a jump in trading of October options that
profit if shares fall below $40 apiece. Almost 14,000 of those
options contracts were traded from Sept. 6 to Sept. 10 -- about 45
times the previous daily average. Citigroup shares fell 8 cents to
$39.52. Yesterday, when trading resumed after the attacks,
Citigroup shares fell $2.85 to $39.60.
-- Bear Stearns & Cos., where investors traded 3,979
contracts from Sept. 6 to Sept. 10 on September options that
profit if shares fall below $50. The previous average volume for
those options was 22 contracts a day. Bear Stearns shares fell
$1.09 to $45.36 and have dropped 10 percent so far this week.
-- Marsh & McLennan Cos., the biggest insurance brokerage,
which had 1,700 employees working in the World Trade Center.
Traders on Sept. 10 exchanged 1,209 contracts on options that
profit if company shares fall below $90 through the third week of
September. Previously, 13 contracts had traded on an average day.
Marsh & McLennan shares fell 20 cents to $84.30, a day after
falling $2.50 to $84.50.