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Out of the money put options

Thinks it’s Matt Levine who keeps saying if you’re going to insider trade don;t do it with out of the money options:

Cyber criminals acquired the personal details of 143 million people from Equifax in a hack in 2017. 15 million of those affected were British.

Ms Dishinger worked at a public relations firm hired by Equifax to handle the fallout from the security breach. She heard about the hack through colleagues before it was publicly announced.

The US Securities Exchange Commission, a stock market regulator, alleges she tipped off her partner Lawrence about the upcoming announcement.

Lawrence “contacted a former business client” to buy out-of-the-money put options on Equifax “with the understanding that the client and L. Palmer would split any trading profits obtained”, said the SEC.

There aren’t that many people who play in out of the money options. Thus it’s fairly easy to track down those few who leap in, play for a few days in the one stock then jump out again. So, what did you know and when did you know it? The lesson of which being that if you are going to play in out of the money options then do so with information you can prove is not insider such.

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