Thursday, March 20, 2008
The Wall St. Journal reports that the SEC is investigating an unusual increase last week in trading in put options of Bear Stearns Stock. Put options give the purchaser the right to sell the stock at a fixed price in the future; the buyer's profit is made if the price of the stock declines during the option period. Heavy trading in puts began on March 7 and became more aggressive in later days. WSJ, SEC's Bear Stearns Probe Zeroes In on 'Put' Trades.