9/11 Put Options

On September 19, 2001 the Chicago Tribune reported that regulators around the world were investigating in attempts to discover if terrorists or individuals who knew of the upcoming events profited through the purchase of put options in financial markets. The 9/11 Commission conceded, “some unusual trading did in fact occur” however, it was claimed, “each such trade proved to have an innocuous explanation.”

The put options volume on Boeing and United Airlines were 4 to 5 times above the daily put volume data prior in the year. The data on record shows no similar trade volume was placed on any other airline stock symbol during the same period of time.

It was also documented that 1,535 puts of American Airlines were purchased a day before the attacks. A Chicago trader, Jon Najarian, noted that the owner of that particular put had the right to sell 153,500 shares at $30, ultimately netting $1.7 million. "Somebody knew about it, whether it was a broker or somebody who knew these guys, or it's one of these terrorist cells," said Jon Najarian, founder of options specialist Mercury Trading in Chicago” (Robert and Allison).

It can’t be denied that the number of put options purchased in the days leading up to 9/11 increased exponentially and the buyers of these options made colossal sums of money. The information was connected to a U.S. based option-trading newsletter that was reported to have faxed the information recommending these trades to its subscribers (The 9/11 Commission Report 499). For the 9/11 Commission report to dismiss such evidence on the premise that the information was shared with its subscribers, therefore it could not have been linked to having prior knowledge is illogical.

The reasoning behind the Commission’s decision and why no charges were filed was due to the fact that 95 percent of the puts were purchased by a U.S. based institutional investor who was said to have been investigated thoroughly by the FBI and SEC and had no conceivable ties to al Qaeda. News and market analysts, as well as all of the supporting evidence suggests the parties who own these puts had to have had advanced knowledge of the attacks. While officially all of the trades placed in the weeks leading up to the attacks were found to be innocuous, the hard evidence and the exponential increase of put options suggests otherwise.

Manor, Robert and Melissa Allison. "Terrorist Trade Probe Widens, Options Buying
Rose in Firms that Attack Affected." Chicago Tribune 27 March 2009.

"Cut Short." The Economist Vol. 360, Issue 824. 19 September 2001. 68-69.27 Mar

National Commission on Terrorist Attacks upon the United States. The 9/11 Commission
Report of the National Commission on Terrorist Attacks upon the United States
New York: Norton, 2004.

You should also cite Allen Poteshman's paper...

"Unusual Option Market Activity and the Terrorist Attacks of September 11, 2001"


"The option market volume ratios considered do not provide evidence of unusual option market trading in the days leading up to September 11. The volume ratios, however, are constructed out of long and short put volume and long and short call volume; simply buying puts would have been the most straightforward way for someone to have traded in the option market on foreknowledge of the attacks. A measure of abnormal long put volume was also examined and seen to be at abnormally high levels in the days leading up to the attacks. Consequently, the paper concludes that there is evidence of unusual option market activity in the days leading up to September 11 that is consistent with investors trading on advance knowledge of the attacks."

Thanks, Alyssa

It's good to remind people of these facts. The put options are still one of the best smoking guns.

Let's go further

Who was the U.S. based institutional investor ?

Some of us have wanted to know that for years,

and that is why we need a new investigation to force the disclosure of information such as the name of the institutional investor.

Either that, or a friendly source at the Chicago Board of Trade.

I've always wondered if Buzzy and Cookie Krongard had another brother...

So many questions begging for answers.

The truth shall set us free. Love is the only way forward.

my bad

my bad