"Put Options", 9-11 and Issuing Warnings

Paul Zarembka is a Professor of Economics, and is the contributing editor to Elsevier's "Research in Political Economy" series, notable for Volume 23 - "THE HIDDEN HISTORY OF 9-11-2001", in which Zarembka examines evidence of insider trading in regard to AA and United airlines. This short piece examines the use of "put options" as a signifier of a speculated terrorist event, and offers some valuable context. -r.


I was just exposed to another article reporting "put option" data on specific stocks, the data being used to suggest that something major may be on the horizon. The particular focus in this instance was on the Sears Tower in Chicago, acquired in 2004 by Larry Silverstein.

I would like to call attention to difficulties with these data, without suggesting that it is impossible to be on target with a warning, only that it is very difficult.

A "put option" is a contract to be able to sell a stock at specific price in the future in anticipation that one could then buy the same stock for much less (or sell what you already own) and make some good money. The contract price is market determined. You can buy the put option from a "market maker". After owning the put option, you could also sell the option before it expires (unload your position); this is important to recognize, as we shall see.

Now for the difficulties in interpreting data:

1. Every transaction has a buyer and seller. The raw reported data will double the number of transactions, because each side is counted once. Some of the reported data after 9-11 did not correct for this fact, pulling in people like Michael Ruppert and Webster Tarpley, and the 911research.wtc7.net/index.html site.

2. The best semi-public data source is OptionMetrics, a service too expensive for non-wealthy individuals, but purchased by some universities, for example, to permit their faculty to undertake research. OptionMetrics divides its data by two, to correct for the problem mentioned above. In
any case, the data are delayed so this July's data may not be available until late August or September.

3. A person interested in a specific stock's put-option data could have access to data compiled daily, and even could do it themselves for free, given enough patience. For example, if one is interested in put-option data for Research in Motion, Ltd. (RIMM) -- the focus of the article I was reading, it being connected to Blackberry and in turn alleged to be useful for detonating bombs -- then go to http://finance.yahoo.com/q/op?s=RIMM&m=2007-09 for contracts which expire September 21, 2007. The stock itself closed on July 3 at $207.94, while the put option to sell at $190 went up from $5.40 the previous day to $6.50 (perhaps because the stock itself was down $6.32 from the prior day, reflecting anticipation of some trouble for the stock?).

If you were interested you could compile those numbers yourself, day after day.

4. In our specific example, transaction volume for July 3 for that $190 price expiring on September 21, 2007, was 253. But recall our comment: there may be persons who unloaded previously purchased put options within that datum. Probably, this is not a near majority, but we don't know from the publicly available data. In any case, the data are not 'clean' from an analytic point of view. Sometimes one can figure the difference out by looking at changes in the reported "open interest" (but that takes us too far afield for this comment).

5. When I read an article that put-option volume has gone up unusually for a specific stock, well, I almost never know the track record of the person so reporting. And the reports after 9-11 for American Airlines and United Airlines put options on the few days before 9-11 had errors (see P. Zarembka, "The Initiation of the 9-11 Operation, with Evidence of Insider Trading Beforehand", THE HIDDEN HISTORY OF 9-11-2001, Elsevier, 2006, pp. 67-69, including the footnotes for Table 4).

In sum, it is not easy to draw conclusions. If the person writing the article were closely following RIMM I suppose an alert is possible, even with the public information generated over days and weeks. But not knowing these authors and their track records, I would not be willing to speculate.

The article in question* seemed to expect reproduction of a prior historical event but this time for the Sears Tower. I'd say, 'careful' with drawing such a conclusion.

Professor of Economics, SUNY at Buffalo


* http://www.truthorlies.org/govtarticle085.html - URL added to Zarembka's piece. -r.

I find this post a little

I find this post a little confusing, to be honest. Not sure exactly what is being said. I was under the impression that many intelligence agencies including the CIA monitor stock transactions in real time?

The Eleventh Day of Every Month

Why the hell did I vote for

Why the hell did I vote for The Decider in 2000? I'm in therapy for that decision..........Im glad I dont work in the Sears tower


The call for caution in this and other such matters is well taken, but would it not be responsible to formally notify the authorities of these concerns and make sure the warning is properly recorded?

How then would you explain why the profits

that were made from some of the 9/11 Put options not collected ?
I understand that there remains over $1 million dollars unclaimed.

Also confused

I hope the author can explain a bit more...

I believe your point is that the put option activity on RIMM may say nothing much, that it is wild to connect it with the Sears Tower, and that any alarm about it is at best preliminary. I am OK with that message.

But, implied in your post is that the same goes for the unusual put option activity on the two airlines, and on other soon-to-be severely impacted companies, just prior to 9-11-01.

Why then did the 9/11 Commission flag it, and investigate it? Of course, their investigation of it was utterly obscure. It may well have been conducted in a willfully negligent manner, as most of what they did was. Even so, they would not have done anything about the put options if the activity did not look highly suspicious.

I gather that the CIA does keep a running analysis of put option activity, just for this sort of thing. Is that also what you understand?

The fact which you mention, that there is both a buyer and a seller of these options seems irrelevant. It is the total activity that was and still is in question.

I now see that Rep posted this, and not the author. Duh.

Presumably there won't be a way to send him this query? He does seem to taint the 9/11 put option evidence with these wilder speculations, via guilt-by-association. The two situations seem very different. Don't they?

Reply from Zarembka

"While writing my present note, I had previously established my position
that insider trading occurred on 9-11. Perhaps I wasn't sufficently clear
in the note, but my research is in my chapter in THE HIDDEN HISTORY OF

Some in the 9-11 truth movement have followed Michael Ruppert and his
citation to Radlauer about insider trading before 9-11. Radlauer,
however, reported incorrect data as did some others, but there were again
others who had the data correct. The record is given in my chapter.

If you wish to take anything from my note, it is simply not to rely on
unverified reports about claims of unusual trading.

Verified reports are another matter, and the Poteshman article in the
"Journal of Business", July 2006, comes to a strong conclusion concerning
put-option trading on before 9-11, using a confidential data source.

If you wish to contact me privately, my address is zarembka(at)buffalo.edu