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Suspicious Trading In Options Industry

Traders Magazine, September 2004

Gregory Bresiger

Proprietary options traders may be rigging prices in the week leading up to the expiration date, according to Professor Allen Poteshman at the University of Illinois at Urbana Champaign. Poteshman recently finished a study that found that sometimes sellers buy and sell shares in an underlying stock to prevent the options from expiring. He adds that the study was presented to former SEC Chief Economist Lawrence Harris. The SEC declined comment.

Copyright 2004 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.tradersmagazine.com

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