Cree Inc. (NDAQ:CREE) is a perfect example of stock market manipulation
Cree Inc. (NDAQ:CREE) is a perfect example of stock market manipulation after seeing a mid day upgrade a few hours before an earnings release On January 19, 2011.
Early in the morning in my live chat room I cited put option buyers come into the February $60 put strike paying $2.32 per contract. This is a directional trade that shares will move lower, which would have those puts increase in value. The next day after earnings, those same put contracts were trading at $6.90 per contract or over 200% profit. Some could think that this was just a lucky trader, but my theory is that this was likely an “informed” trader knowing what the news was before the rest.
Here’s what I have learned over the years with the more informed wealthier bunch of traders such as hedge funds, institutions and big brokerage firms. When they have some kind of information that is not public and they think it can move the stock, they are not going to tell the public. They are going to act on it themselves and when they do they usually go into the options market because of the leverage they get with options.