Question About 9/11 Options Trading

I remember reading that a very large number of “put” options were traded on American and United Airlines stocks just before the 9/11 attacks. But I don’t recall ever hearing who did that or why. Does anyone have any information on this?

3 thoughts on “Question About 9/11 Options Trading

  1. I have the URLs of the original stories posted above. I don’t remember the 9/11 Commission report on this, but if they had decisively refuted the story I think I would remember that. As I remember, they just said that they weren’t able to prove anything — not that they’d followed up on the short-selling and found that it was non-existent or innocuous.
    I read big chunks of the 9/11 report, but I don’t have it here. There was a lot of interesting stuff in it, but they tiptoed around a lot, as you’d expect a bipartisan consensus report to do.

  2. Footnote 130 (end of Chapter 5), page 499 of the report: “Highly publicized allegations of insider trading in advance of 9/11 generally rest on reports of unusual pre-9/11 trading activity … ”
    The note goes on to say that the FBI looked into some suspicious-looking transactions but found that all had innocuous explanations. (One “put” option purchase by a large institutional investor was almost completely offset by a “call” option purchase of similar size a couple of days later, but both took place before 9/11, for example.) The note cites as its sources interviews with Joseph Cella, an FBI briefing, an SEC memo (“Pre-September 11 Trading Review,” dated May 15, 2002) and other sources.
    Without reviewing the source material it’d be hard to say whether they got a definitive answer one way or the other, but on its face it looks as if they looked into it, found no corroborating evidence and moved on. That’s not quite the same as disproving it, of course.

Comments are closed.