Porsche : “We are not speculators”
German luxury carmaker Porsche has made 1 billion profit on selling cars in 2008, and 6.8 billion on trading options. Most of the option trading revenue is coming from cornering the market in Volkswagen shares.
Powerplay in derivative markets
Powerplay in the financial markets has been defended by “hedging” themselves against a rise in shareprice of VW shares. Seriously doubt it, but guess they have decent lawyers. They need those to fight off their victims.
DAX options
Today mister Holger Härter, CFO, announced a EUR 400 million profit on trading options in the Dax – excluding Volkswagen. That’s a hell of a profit on a business which isn’t your own. There’s no industrial logic behind “exploiting small price differences between options”. Food for lawyers. Possible that they have been trading DAX index options, rising on the back of the VW boost. Quoting CEO Wendelin Wiedeking: “We are not speculators – we never have been and will never want to be”. Right.
You mentioned the takeover of Saen by All Option earlier… maybe VW is the reason?
Rumor has it Saen indeed burned their fingers on VW options in 2008. But then again, VW trading losses have been linked to almost all trading firms.
how did VDM handel VW?
I’m just wondering about two things:
firstly, to make that kind of profits, they must have bought some HUGE lots of calls, and probably some far OTM, but that should have triggered an alarm to the average market maker no? And Porsche was probably buying way over theo there. I’m also wondering about the timing of the buying, was it spread over weeks, months before the squeeze?
Were they buying all across the calendar?
Secondly, what triggered the squeeze exactly?
Did Porsche just bought stocks aggressively just before exercising the calls?
And what kind of capital Porsche is putting to finance that trading activity that busted several players…
Awaiting your inside knowledge guys…
First of all, Porsche started the squeeze with a press release they had control of a larger than expected share of VW and about to buy the rest.
Second, they had especially a lot of over-the-counter call options which didn’t cross the screen. That’s where most of the money comes from.
Thanks for that Jack!
And what about Optiver and IMC?
Were they just more careful on the wholesale market?
And better “hedged” as well I’d guess…