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Wall Street insiders reap huge profits in minutes
Key Excerpts from Article on Website of New York Times
Posted: May 10th, 2010
http://www.nytimes.com/2010/05/08/business/08cancel.html
Someone on Wall Street just made a killing. That was the subject of so much chatter among professional investors once the smoke cleared from the sudden panic and recovery on Thursday [May 6] that briefly knocked some stocks down to a penny or two a share. Who had kept his cool during those terrifying minutes and scooped up some dreamlike bargains? One thing, however, is certain: By luck, savvy, lightning speed or all three, there was money gobs of it to be made from the bargains that came and went in an instant. On Friday the blogosphere was alight with conspiracy theories suggesting that perhaps the whole thing had been instigated by a big bank or a hedge fund looking to make a quick profit. Some investment pros surely made a fortune from the trillion-dollar market swing. Somebody got Accenture at a penny. Theyre ready to announce their retirement, joked Daniel Seiver, a finance professor at San Diego State University. Investors who owned gold or United States Treasuries ... saw big gains as global investors sought havens. But even those gains were small compared with those won by options traders who had placed bets on an index that rises in value when volatility increases. The guys who probably made the most money in this were options players, said Larry Tabb, chief executive of the Tabb Group, a financial services consulting firm.
Note: This article refers to the record-breaking 1,000 point intra-day drop in the Dow Jones index on May 7. For an abundance of deep reporting on the hidden realities of Wall Street's shadowy operations, click here.
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