What you are about to read below is startling.
- Every time that the market has fallen in recent years, insiders have been able to get out ahead of time…
- [What] is so alarming [this time round is] that corporate insiders are selling nine times as many shares as they are buying right now.
- In addition, some extraordinarily large bets have just been made that will only pay off if the financial markets in the U.S. crash by the end of April.
- So what does all of this mean? [Could it be that they] have insider knowledge that a market crash is coming?
Evaluate the evidence below and decide for yourself. Words: 570
So writes Michael Snyder (http://theeconomiccollapseblog.com) in edited excerpts from his original article* entitled Do Wall Street Insiders Expect Something Really BIG To Happen Very Soon?.
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Snyder goes on to say in further edited excerpts:
- Why are corporate insiders dumping huge numbers of shares in their own companies right now?
- Why are some very large investors suddenly making gigantic bets that the stock market will crash at some point in the next 60 days?
- Do Wall Street insiders expect something really BIG to happen very soon?
- Do they know something that we do not know?
The last time executives sold their company’s stock this aggressively was in early 2012, just before the S&P 500 went on to correct by 10% to its low for the year. Insiders know more than the vast majority of market participants [so this is something to make note of.]
Another indication that the stock market may be headed for a significant tumble in the months ahead….[is that] the last time that the financial markets in the U.S. were as “euphoric” as they are now was right before the financial crisis of 2008.
As I mentioned above, some people out there have recently made some absolutely jaw-dropping bets against stocks which will only pay off if there is a financial crash at some point in the next few months. Business Insider reports that:
According to Barron’s columnist Steven Sears, someone made a big bet against the financials ETF yesterday (ticker symbol XLF), and it has everybody buzzing.
The trader bought 100,000 put options on the ETF (a put option increases in value when the price of the underlying asset, in this case, the ETF, goes down).
To put that number in perspective, Sears writes, “Few investors ever trade more than 500 contracts, so a 100,000 order tends to stop traffic and prompt all sorts of speculation about what’s motivating the trade.” According to Sears, the trade “has sparked conversations across the market.”
Reportedly, those put options expire in April.
Art Cashin of UBS has also noted that:
In past years I have reported on trades that were so large it appeared someone had inside knowledge of a pending event. Sometimes those were massive put positions on the S&P. A new trade just appeared that suggests there will be a market event in the near future. Last week somebody put on a call spread on the VIX using the April 20 and 25 puts. They bought 150,000 contracts for a net of $75 per contract. That is an $11,250,000 bet that the VIX will move over 20 over the next 60 days. You would have to be VERY confident in your outlook to risk $11 million on a directional position with the VIX at five year lows and the markets trying to break out to new highs.
[The above does not]… of course, guarantee that the stock market is going to move a certain way…but when you step back and look at the bigger picture, it does appear that Wall Street insiders are preparing for something.
Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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