Traders burned as I suspected....

Last week, I posted the following notes:

"-The number of bearish put options traded on Lehman's stock exceeded call options by 3-to-1 and put volume in the first three hours of the day topped the daily average of the past 20 sessions."

"-A so-called bear spread of almost 20,000 Lehman options contracts traded at 9:51 a.m., according to traders and Bloomberg data. An investor using the strategy buys puts while simultaneously selling them at a lower strike price. The position reduces the overall cost of the trade and also caps the total potential profit if the stock falls."

And then I made the following prognostication:

"-Hmmm!  Sounds like some traders are going to get burned.  Its been my experiences that more times than not, when people take a huge "speculative, rumor-based, negative" position like this...they usually lose.  This is action can be great to watch but I wouldn't dare engage into it.  This one will be fun to see unfold."

Fast forward to today:  Lehman is trading at $43.94 up $6.34 or 15.50%.  Wow!  I sure hope they unwinded the trade before this morning.