Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Wings-FPT -- Ignore unavailable to you. Want to Upgrade?

To: OX who wrote (60)	9/6/2000 1:48:47 PM
From: OX	Read Replies (1) \| Respond to of 124

CBOE probes Associates First, Citigroup options (probably doesn't belong here, but I couldn't figure out where else to post this...) --- biz.yahoo.com Wednesday September 6, 12:38 pm Eastern Time CBOE probes Associates First, Citigroup options (UPDATE: Adds byline, details throughout) by Laura Jacobs CHICAGO, Sept 6 (Reuters) - The Chicago Board Options Exchange is investigating big option orders to buy the stock of Associates First Capital Corp. in the two days before Citigroup Inc. agreed to buy the finance company for $31 billion. The brokerage firm that processed the orders is Citigroup's own Salomon Smith Barney securities unit, according to two traders. ``The CBOE has initiated an investigation into unusual trading activity in AFS and Citigroup options,'' said CBOE spokeswoman Lynne Howard-Reed in response to an inquiry. A Citigroup (NYSE:C - news) spokesperson was not immediately available for comment and Associates First (NYSE:AFS - news) referred questions to Citigroup. Traders said Salomon Smith Barney, owned by Citigroup, on Friday and Tuesday bought about 4,000 September 27.5 calls in Associates First, some 3,000 Friday and 1,000 more Tuesday. A spokesman for Salomon Smith Barney was not immediately available for comment. Those trades would have comprised the bulk of the options activity in September 27.5 calls on both days. On Friday, roughly 3,455 Associates First options traded on the CBOE and Amex combined. On Tuesday, about 1,320 options changed hands interexchange, according to Track Data figures. During the last month, average daily volume in the option was about 700 contracts. Theoretically, if the calls had been bought at Tuesday's closing CBOE price of $1-9/16 and sold Wednesday morning at 12, the midpoint between the bid and offer, the trade could have generated a profit of nearly $4.2 million. Associates First options also are listed on the American Stock Exchange, but Amex spokesman were not immediately available for comment . Citigroup options also are listed on the Amex, Pacific Exchange, Philadelphia Stock Exchange and International Securities Exchange. Spokesman at the Pacific Exchange and the Philadelphia Stock Exchange each had no comment on the matter. ISE officials were not immediately available for comment. The options trades were viewed as unusual partly because those September options, which expire on Sept. 15, had relatively little open interest and low volume at the time, said a CBOE market maker. He also noted that the firm that handled the options order, which he said was for a customer, was owned by the company that purchased Associates First. ``It was entered as a customer order,'' the market maker said. ``I've been down here 15 years and I've never seen anything this blatant ... The exchange has already been down here asking about it.'' Added Paul Foster, investment strategist with 1010wallstreet.com: ``The tie-in is Salomon Smith-Barney is a unit of Citigroup. It's interesting.''