From: Alexander Chislenko <sasha@cs.umb.edu>
Date: Mon, 18 Apr 94 20:32:31 PDT
To: cypherpunks@toad.com
Subject: Money Laundering through Options market.
Message-ID: <199404190332.AA17210@eris.cs.umb.edu>
MIME-Version: 1.0
Content-Type: text/plain


  I sent the following to the messages' author rather than the list
by mistake;  hope it is [still] of some value to the list;
If nobody minds (I'm not sure about the forwarding rules here), I'll
forward the $laundry thread to the extropian list.
 
        --------        ---------       -------------
 
  I would recommend transactions in *options*, not in futures.
If the option is far out of the money, you can easily get >>95%
assurance that the money will go the way you wanted.
If you execute several simultaneous transactions in different options
(including spreads on opposite sides of the price range, unrelated
markets, stop-orders, etc.), the results may be practically guaranteed
on the first try.
 
  Of course, transactions in related areas, shifted contract positions, 
etc. will be harder to track than directly balanced transactions, but
somehow I doubt that existing schemes, if any, are that obscure.
 
  Also, there are not that many commodities/currencies/... with markets
large enough to execute $1M+ contracts like that at a time.
 
  I'd expect people to use major markets in several transactions not large
enough to attract attention of market analysts.
 
   With access to the transactions database, one could more or less
easily compile a list of traders engaged in such activities and amounts
of money transferred.
 
   I believe that this way of money laundering is well within understanding
of at least some people.  The ways of catching them are, probably, too hard
for the corresponding agencies, at least organizationally.
 
  So the list of suspected offenders may be of pretty high value...
which can probably be realized... with some caution.
 
An article claiming that such a list is being compiled may well stop almost
all such laundering  [ which may kill both futures and options markets ;-) ]
 
 
  I personally would rather wait for more secure anonymous transactions
to launder *my* millions though.
 
 
sasha@cs.umb.edu
 
  P.S.   I read Hillary Clinton turned $1K into $100K in cattle futures
         market.   Isn't that amazing?
 
  P.P.S.  I'll bet $10K against $1 that you can't donate *me* $50K like this.
          Any takers?
 
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Disclaimer:  The above text is pure speculation. 
             I would never do anything mentioned there.