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Comment Re:and as usual... (Score 1) 352

Sorry if doubly posted. Damn third world ISPs. Ever been to the Netherlands? It's not the United States, believe it or not. Their judicial history and mindset is different than yours, or more accurately, what you perceive those of your country to be (I'm assuming from your solipsism that you're American). They don't consider the American '"separation of powers" thing' so pesky as it doesn't apply to them. And if you think judges don't make new law in the U.S.A. and neither are they supposed to, you are sorrily mistaken, young v1. They are not supposed to use their powers of compulsion to harass people whose behavior they abhor into acquiescing to non-existent laws, but that's a very different thing.

Comment Re:Warning: Instant big profits never happen... (Score 2, Insightful) 324

You're half right. Every one of the, uncancellable, option trades had to be covered by a market maker in the option market on which it was sold. (A market maker is a firm that is always willing to buy at some price and sell at a slightly higher price, so that there is always a market.) The market maker doesn't just assume all the risk -- it covers it self by buying and selling the stock underlying the option, from the equity market, in this case nasdaq. These market makers, at least one of whom, per exchange, is obligated _always_ to provide a market for the stock, get their equity trades rolled back, also, even thought they calculated the price of the options based on the erroneous underlying -- if the stock is trading at $40 the right to sell it next month @ 45 is worth at least $5, a little more since there is time value -- it could go up and make more money, but it can exercise right now and get that $5 profit.

So the market makers are fucked because they sold all the options at bad prices, had the equity trades they used to offset the risk they are obligated to take removed, and now must scramble to price the options correctly, since the historical data used to price an option, i.e. volatility of the nderlying stock price is now hosed.

For every angle shooter, there was (at least) one situationally innocent player getting the same reaming.

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