Imported from previous forum
When a single investor is trading buys and sells for Equity ticker MAX and simultaneously doing options strategy(ies) with multiple puts and calls for the same underlying security ticker MAX, do regulatory authorities see these as unrelated orders or do they try to see if there is some kind of a fradulent pattern which is provable only by correlating parameters of the Equity orders and the options orders ?
Regards,
K. Mahesh
[ original email was from John Harris - john.harris@bondmart.com ]
Mahesh,
Setting aside what “regulatory authorities see,” such orders would at least be “related” on the basis of source. But can one deduce a “fraudulent pattern” by “correlating parameters” of such orders, absent some other information? I doubt it. And would regulators automatically begin an investigation merely because such orders are placed? I doubt that, too. If, however, a significant event arises with MAX as its locus, then I would expect regulators to look for unusual, contemporaneous purchases and sales of MAX or options on MAX.
Best,
John
When a single investor is trading buys and sells for Equity ticker MAX and simultaneously doing options strategy(ies) with multiple puts and calls for the same underlying security ticker MAX, do regulatory authorities see these as unrelated orders or do they try to see if there is some kind of a fradulent pattern which is provable only by correlating parameters of the Equity orders and the options orders ?
Regards,
K. Mahesh