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San Francisco Chronicle
SEC investigating airline stock deals Investors bet against United, American
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/18/MN63703.DTL
In the days leading up to terrorist attacks on America, unknown investors made unusually large bets in the financial markets against the stocks of two companies that would come to be prominently associated with the disaster: United Airlines and American Airlines.
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Using what is known in the options trading industry as a "put," investors bet heavily against United's parent, UAL Corp., on Sept. 6 and 7, and against American's parent, AMR Corp., on Sept. 10, in the three trading days before the attack. Put options are essentially market methods for profiting when an investor believes the price of a security will drop.
No similar bets were made against the stocks of any of the companies' major competitors, including Delta, Continental, Northwest and Southwest. That would suggest that the investors had specific reason to believe UAL and AMR shares would drop.
In addition, the trading ratio in UAL put options on the Thursday before the attack was 25 times its normal level, according to data from the Options Clearinghouse Corp.
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