Bombing of Borussia Dortmund Bus Targeted Club’s Stock, Prosecutors Say
The suspect, identified only as Sergei W. in keeping with German privacy laws, was charged with attempted murder, inflicting serious bodily harm and carrying out an explosion in the attack, whichwounded one player and one police officer.
His arrest represented the clearest explanation to date of the motive for an attack that has been attributed at various times to Islamist extremists and right-wing and left-wing political groups, and has added to election-year fears that Germany is vulnerable to terrorism.
According to prosecutors, the suspect had checked into the hotel where the team was staying. On the day of the attack, he purchased 15,000 put options over the internet for shares in Borussia Dortmund, which is publicly traded. These would have entitled him to sell shares later at a predetermined price.
The financial maneuver could have resulted in a substantial profit for the suspect if the shares had undergone a “massive fall” value in the interim, prosecutors said. “A significant share price drop could have been expected if a player had been seriously injured or even killed as a result of the attack,” they said.
https://www.nytimes.com/2017/04/21/world/europe/borussia-dortmund-bus-attack.html
The suspect had allegedly bought 15,000 put options on Borussia Dortmund shares - reportedly priced at €78,000 (£65,000; $83,600) - betting that they would drop sharply after the attack. He would have profited from this fall.
The suspect placed the bet on 11 April using an IP address traced to the hotel, after taking out a loan for the money.
What are put options?
The suspect, identified only as Sergei W. in keeping with German privacy laws, was charged with attempted murder, inflicting serious bodily harm and carrying out an explosion in the attack, whichwounded one player and one police officer.
His arrest represented the clearest explanation to date of the motive for an attack that has been attributed at various times to Islamist extremists and right-wing and left-wing political groups, and has added to election-year fears that Germany is vulnerable to terrorism.
According to prosecutors, the suspect had checked into the hotel where the team was staying. On the day of the attack, he purchased 15,000 put options over the internet for shares in Borussia Dortmund, which is publicly traded. These would have entitled him to sell shares later at a predetermined price.
The financial maneuver could have resulted in a substantial profit for the suspect if the shares had undergone a “massive fall” value in the interim, prosecutors said. “A significant share price drop could have been expected if a player had been seriously injured or even killed as a result of the attack,” they said.
https://www.nytimes.com/2017/04/21/world/europe/borussia-dortmund-bus-attack.html
The suspect had allegedly bought 15,000 put options on Borussia Dortmund shares - reportedly priced at €78,000 (£65,000; $83,600) - betting that they would drop sharply after the attack. He would have profited from this fall.
The suspect placed the bet on 11 April using an IP address traced to the hotel, after taking out a loan for the money.
What are put options?
- A put option on a share or other asset is a contract, which allows an investor to sell the asset at an agreed price, on an agreed day in the future
- If the market price falls before then, the investor can then buy the asset more cheaply on the open market and sell it at the higher, option price to whoever sold the option. The investor pockets the price difference