3SOF

fyi again:

Optionable's BMO Bite

By Mark DeCambre
TheStreet.com Senior Writer


BMO Financial's (BMO - Cramer's Take - Stockpickr - Rating) natural gas blowup could yet singe commodities broker Optionable (OPBL - Cramer's Take - Stockpickr).

BMO, also known as Bank of Montreal, admitted Friday that it lost more than $300 million on natural gas trades that went bad.
Optionable, a Valhalla, N.Y., broker of energy options and derivatives trades to U.S. hedge funds and other financial institutions, said in a recent federal filing that BMO accounted for 24% of net revenue last year. But that figure could significantly understate the extent of Optionable's dependence on Bank of Montreal, its largest customer, for business.

Optionable is in the business of finding so-called counterparties for energy trades -- meaning it matches buyers with sellers. The broker charges a commission to both parties.

A spokesman says counterparty deals represent 75% of Optionable's trading revenue. In such transactions, revenue from any given party represents just half of the company's potential revenues. That's a key point in assessing Optionable's dependence on BMO.

A look at Optionable filings from last year show that net revenue for 2006 was $16 million. Taking Optionable's 24% figure puts revenue from BMO at $3.8 million. That figure, in turn, represents 43% of the firm's $8.9 million in 2006 brokerage fees, according to filings with the Securities and Exchange Commission.

But remember, there are two sides to any counterparty deal. So trading deals involving BMO appear to account for 86% of the firm's brokerage fees, even if half of those fees aren't actually from BMO itself.

An external spokesman for Optionable agrees that BMO's impact is likely more than the 24% when factoring in counterparties. He says counterparty trading, in which Optionable gets paid on both sides, represents about three-quarters of its trading revenues. Floor trading makes up the remainder, says the spokesman, declining to provide a further breakdown of Optionable's business with BMO on the floor trades. In floor trades, brokers are only paid once, by the exchange.

Toronto-based BMO, which has been one of the more aggressive energy trading banks of its size, has said that its losses will be recorded on pretax basis in the second quarter of its 2007 fiscal year. Although BMO chief Bill Downe described the losses as unacceptable, he didn't indicate that BMO would halt its energy trading operation, which has been a lucrative one before its blowup. Nonetheless, if BMO finds it necessary to pull back significantly, Optionable could face a need to diversify.

In April, the New York Mercantile Exchange (NMX - Cramer's Take - Stockpickr) acquired a 19% stake in Optionable. Optionable's first-quarter earnings call will be held after the close of trading Tuesday.

Shares rose 9 cents over the counter Monday to $5.65.

please be careful again 

We all agree (Shorts and longs) that Bank of Montreal has done a good deal of business with OPBL during its infancy in 2006 but the main point is not what has happened in the past but what is currently happening and will happen in the future.

There is no doubt that if in deed BOM decides to no longer trade through OPBL and OPBL loses 24% of the revenue they earned in 2006 in a matter of months that will impact "current" earnings to a certain extent. BUT THIS IS MISLEADING AS FAR AS THE TRUE 2007 IMPACT.

If you decided to invest in OPBL due to their relationship with BOM then you are very short minded. There is no doubt that OPBL has grown tremendously in just the last 4 months since 1/2007. Thus, as they have grown the BOM revenue has less and less impact on their overall earnings number. That 24% will drop to 20% then to 15% of overall revenue and so on as OPBL picks up additional clients and until BOM is only a small portion of the revenue. Who is to say they didn't pick up a few other large clients like BOM in the past 4 months!! BOM revenue may be under 10% of current on going revenue according to 2006 BOM revenue.

Once again this is a "hyper growth" story that will continue to unfold over the coming quarters.

REMEMBER: A company like this is not driven by what they did last quarter but what will be done in the quarters to come. (That is unless the current quarter is a total flop)

Tomorrow will be a much anticipated conference call and with the 24% short position this will either rocket up in the next few days after or dip down but with a floor as the shorts cover their positions.

Quote from: la-onda on April 29, 2007, 09:06:14 PM
In my calculation it is more than 24 %.
just be careful...

I have told you

gap is closed ...fibonacci retracement 3.78 should be completed...in 3.88

hat a volatility Stock yupiie!--- at the end up to 4.29 back down under 4.00... sold so far....made good daytrades today....currently out...will we test the MA 200 at 3.17? ...crazy stock but good for daytrading made cash today.

Closed at 3.94!

Quote from: la-onda on April 30, 2007, 07:34:36 PM
fyi again:

Optionable's BMO Bite

By Mark DeCambre
TheStreet.com Senior Writer
BMO Financial's (BMO - Cramer's Take - Stockpickr - Rating) natural gas blowup could yet singe commodities broker Optionable (OPBL - Cramer's Take - Stockpickr).
BMO, also known as Bank of Montreal, admitted Friday that it lost more than $300 million on natural gas trades that went bad. Optionable, a Valhalla, N.Y., broker of energy options and derivatives trades to U.S. hedge funds and other financial institutions, said in a recent federal filing that BMO accounted for 24% of net revenue last year. But that figure could significantly understate the extent of Optionable's dependence on Bank of Montreal, its largest customer, for business. Optionable is in the business of finding so-called counterparties for energy trades -- meaning it matches buyers with sellers. The broker charges a commission to both parties.

A spokesman says counterparty deals represent 75% of Optionable's trading revenue. In such transactions, revenue from any given party represents just half of the company's potential revenues. That's a key point in assessing Optionable's dependence on BMO.
A look at Optionable filings from last year show that net revenue for 2006 was $16 million. Taking Optionable's 24% figure puts revenue from BMO at $3.8 million. That figure, in turn, represents 43% of the firm's $8.9 million in 2006 brokerage fees, according to filings with the Securities and Exchange Commission. But remember, there are two sides to any counterparty deal. So trading deals involving BMO appear to account for 86% of the firm's brokerage fees, even if half of those fees aren't actually from BMO itself.
An external spokesman for Optionable agrees that BMO's impact is likely more than the 24% when factoring in counterparties. He says counterparty trading, in which Optionable gets paid on both sides, represents about three-quarters of its trading revenues. Floor trading makes up the remainder, says the spokesman, declining to provide a further breakdown of Optionable's business with BMO on the floor trades. In floor trades, brokers are only paid once, by the exchange.

Toronto-based BMO, which has been one of the more aggressive energy trading banks of its size, has said that its losses will be recorded on pretax basis in the second quarter of its 2007 fiscal year. Although BMO chief Bill Downe described the losses as unacceptable, he didn't indicate that BMO would halt its energy trading operation, which has been a lucrative one before its blowup. Nonetheless, if BMO finds it necessary to pull back significantly, Optionable could face a need to diversify.
....
please be careful again 

I hope nobody is still long invested 

just fyi:
BMO suspends ties with energy trader Optionable
Tue May 8, 2007 8:23 PM ET

VANCOUVER, British Columbia, May 8 (Reuters) - Bank of Montreal suspended its relationship with brokerage firm Optionable Inc  on Tuesday, and confirmed two of the bank's commodities
traders are on leave pending an external review. Canada's fourth largest bank said it has also changed the operating structure of BMO Capital Markets "to provide additional oversight of
the commodities business," which would now report "within a business line most experienced in the trading and valuation of derivatives."
The announcement came just over a week after BMO issued a surprise warning that its second-quarter results would be stung by a pretax trading loss of between C$350 million and C$450 million caused by changing conditions in the energy markets.
Bank of Montreal is one Optionable's largest customers and the New York firm had been linked in published reports in Canada to the losses. The bank's statement did not elaborate on the nature of the review. The bank's statement confirmed press reports that two BMO traders had been placed on leave while the bank investigated the losses. The short statement did not say how long it expected the review to take.

No one was immediately available at Optionable's offices in Valhalla, New York, for comment on the BMO announcement.

When BMO announced the loss it said changing energy market conditions had hurt its positions in natural gas, and analysts said the news raised questions about the bank's risk management strategy.

hope my warning was taken seriously by all board members !!

Nymex Nails Optionable
By Mark DeCambre
TheStreet.com Senior Writer
5/10/2007 10:37 AM EDT
URL: http://www.thestreet.com/newsanalysis/wallstreet/10356098.html

Optionable (OPBL) investors just got burned again.

The Valhalla, N.Y.-based electronic options trader plunged for the second day in a row Thursday after a big shareholder said it would compete with Optionable in the commodities trading business.

After dropping 41% Wednesday, Optionable hemorrhaged 50% Thursday to $1.40. Shares traded as high as $8.63 earlier this year.

The latest blow comes from the New York Mercantile Exchange (NMX) , which said it plans to electronically trade options and futures in natural gas, crude oil, gold and silver via its CME Globex trading platform.

Nymex has a 19% stake in Optionable, which many observers believed meant that the exchange intended on either buying Optionable at some point or incorporating it into its own array of services. But Nymex's move to launch its own electronic service means that scenario is not likely.

The Nymex service is expected to launch sometime in late June, according to one observer. A call to Nymex was not immediately returned.

Optionable made a filing with the Securities and Exchange Commission yesterday warning that the new Nymex service could pose a threat to its options exchange, known as Opex.

An external Optionable spokesman declined to comment.

"We believe that some of the contracts trading on the CME Globex platform may compete with contracts trading on the company's Opex platform," the filing says. "The company is unable to quantify the impact of this potential competition on its business, including its future results of operations and financial condition."

Nymex's announcement comes just a day after BMO Financial (BMO) said it has suspended doing business with Optionable. BMO accounted for 30% of Optionable's trading revenues, according to the company's first-quarter earnings report.

How big an impact the one-two BMO/Nymex punch will have on Optionable remains to be seen, but it's not likely to be favorable to the company's nascent business.

be careful again!!
Optionable Inc. Sued for Securities Law Violations
Saturday May 12, 11:11 am ET

NEW YORK, NY--(MARKET WIRE)--May 12, 2007 -- On May 11, 2007, the law firm of Sarraf Gentile LLP commenced a securities fraud class action lawsuit on behalf of those investors who acquired the securities of Optionable Inc. (OTC BB:OPBL.OB - News) ("Optionable" or the "Company") during the period May 6, 2005 to May 10, 2007, inclusive (the "Class Period"). The lawsuit is pending in the United States District Court for the Southern District of New York and names as defendants Optionable Inc. and certain of its top executives.
The Complaint alleges that Optionable and certain of its officers and directors violated the federal securities laws by making misleading statements concerning the Company's business prospects and growth. Specifically, throughout the Class Period, Defendants failed to disclose the following facts: (i) Optionable was engaged in improper deals with its biggest client, the Bank of Montreal ("BMO"); (ii) Optionable's business was extremely dependent upon BMO; and (iii) Defendants were able to retain BMO only because they helped its star options trader mismark options, falsify the trading price at which BMO traded those options, and hide massive losses incurred by BMO as a result of those trades. While the stock was trading at artificially inflated prices, as a result of this fraudulent scheme, Defendants sold shares of Optionable, for proceeds of over $28 million.

On April 27, 2007, BMO announced that it had lost between $300 to $400 million on trades executed through Optionable. In response to this disclosure, the Company's stock dropped 33%. Then, on May 8, 2007, BMO announced it was suspending all of its business relationships with Optionable. Finally, on May 10, 2007, it was disclosed that Deloitte & Touche LLP had conducted an audit of the trades BMO had conducted with Optionable and found that there had been "serious mismarking of the book of natural gas options." On this news, the price of Optionable fell further to $0.84, representing a total drop of nearly 90%. During the Class Period, Optionable stock traded as high as $9.10 per share.
Plaintiff is represented by the law firm of Sarraf Gentile LLP, which has extensive experience in the prosecution of class actions on behalf of investors.
If you bought the securities of Optionable between May 6, 2005 and May 10, 2007, you may, no later than July 10, 2007, move the Court to appoint you as lead plaintiff, a representative party that acts on behalf of other class members. The Court must determine whether the class member's claim is typical of other class members' claims, and whether the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Sarraf Gentile LLP or other counsel of your choice, to serve as your counsel in this action.

&

Optionable in Legal Limbo

By Mark DeCambre
TheStreet.com Senior Writer
5/11/2007 5:10 PM EDT

Law firm Kahn Gauthier Swick says it believes there may be grounds for a class-action lawsuit against the troubled electronic trading platform Optionable (OPBL - Cramer's Take - Stockpickr).
Kahn Gauthier hasn't filed any such suit. But Canada's National Post reported Thursday that a forensic auditor hired by a former Optionable business partner found allegedly mispriced natural gas options. An external spokesman at Optionable declined to comment, but attorney Michael Swick at KGS in New York says such a finding could merit a shareholder lawsuit.
The National Post reported that BMO (BMO - Cramer's Take - Stockpickr - Rating), the big onetime Optionable customer that suspended business with the firm this week following a huge loss on natural gas option trades, hired Deloitte & Touche to look at the firms' dealings. The Post report indicates that forensic auditors at Deloitte believe there was a discrepancy in pricing of natural gas options in which Optionable participated.
Swick says that could give shareholders of Optionable grounds for a suit against the firm, whose shares lost more than three-quarters of their value this week.

"They weren't reporting the actual trade value," says Swick, referring to the Deloitte claims reported in the National Post. "Looks to me like there was some conspiracy between Optionable and the BMO traders to hide the losses."

A BMO spokesman in Toronto declined to comment.
A discrepancy in pricing could imply that the broker, in this case Optionable, may have corroborated prices to support those that BMO placed on its natural gas options contracts, says one commodities trader.  Valhalla, N.Y.-based Optionable has had perhaps the worst week on Wall Street. After dropping 41% Wednesday, Optionable lost more than half its value Thursday to close at 85 cents. Shares traded as high as $8.63 earlier this year.
The BMO mess isn't Optionable's only headache. The New York Mercantile Exchange (NMX - Cramer's Take - Stockpickr) said Wednesday it plans to electronically trade options and futures in natural gas, crude oil, gold and silver via its CME Globex trading platform.
Nymex has a 19% stake in Optionable, which many observers believed meant that the exchange intended on either buying Optionable at some point or incorporating it into its own array of services. But Nymex's move to launch its own electronic service means that scenario is not likely. The Nymex service is expected to launch sometime in late June, according to one observer. Nymex also has warrants to acquire up to 40% in Optionable. Those warrants are well out of the money at its current trading price. Nymex dropped its bombshell just a day after BMO's business suspension announcement. BMO accounted for 30% of Optionable's trading revenue in the first quarter. The situation appears to have Optionable a bit worried. It is hiring a crisis management firm and asking lawyers if it has grounds for its own suit against BMO, according to a report by Toronto's Globe & Mail.

la-ondo:

These 2 law firms that are filling suit are known "ambulance chases" in the securities industry. A quick search of google turned up the following:

Sarraf Gentile LLP:
http://newsblaze.com/story/2006042815035800002.mwir/topstory.html
http://findarticles.com/p/articles/mi_m0EIN/is_2005_Sept_14/ai_n15389972
http://www.marketwire.com/mw/release_html_b1?release_id=125940
http://www.seomarketwire.com/0504/20050428T224500Z-085665.html
http://www.feedsfarm.com/article/e685b1910f91601b9933c43a8e17cd3b4e0e61eb.html
http://www.seomarketwire.com/0504/20050426T130000Z-085334.html
and many more...............

Kahn Gauthier Swick:
http://www.feedsfarm.com/article/95f1e4bdc5205f0d3b1694e1060f1be9cc096275.html
http://www.marketwire.com/mw/release_html_b1?release_id=249927&tsource=3
http://www.kgscounsel.com/case/case.asp?lngCaseID=4939
http://www.marketwatch.com/news/story/investor-notice-kgs-announces-investigation/story.aspx?guid=%7B30299316-ACCB-4B73-9E74-C8510BE5F86D%7D

There are more examples but i think I made my point. These 2 firms are full on scum bag lawyers. There suits result in little or no value to the shareholder after they are paid. Ya know its funny how quickly they filed filed suit.

As far as the OPBL liability to the BMO, it seems rather limited. Please note the following lines in the OPEX customer agreement.

PARTICIPANT ACKNOWLEDGES, UNDERSTANDS AND ACCEPTS THAT OPTIONABLE MAKES NO WARRANTY WHATSOEVER TO PARTICIPANT AS TO THE SYSTEM OR THE SYSTEM, EXPRESS OR IMPLIED, AND THAT THE SYSTEM IS PROVIDED ON AN "AS IS" BASIS AT PARTICIPANT'S SOLE RISK. OPTIONABLE EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NEITHER OPTIONABLE NOR ITS MANAGERS, OFFICERS, AFFILIATES, SUBSIDIARIES, SHAREHOLDERS, EMPLOYEES OR AGENTS MAKE ANY WARRANTY WITH RESPECT TO, AND NO SUCH PARTY SHALL HAVE ANY LIABILITY TO PARTICIPANT (i) FOR THE ACCURACY, TIMELINESS, COMPLETENESS, RELIABILITY, PERFORMANCE OR CONTINUED AVAILABILITY OF THE SYSTEM OR THE SYSTEM, (ii) FOR DELAYS, OMISSIONS OR INTERRUPTIONS THEREIN, (iii) FOR THE CREDITWORTHINESS OF ANY OTHER PARTICIPANT, OR (iv) FOR THE ACTS OR OMISSIONS OF ANY BROKER AUTHORIZED WITHIN THE SYSTEM BY PARTICIPANT TO UTILIZE THE SERVICES ON BEHALF OF PARTICIPANT. OPTIONABLE SHALL HAVE NO DUTY OR OBLIGATION TO VERIFY ANY INFORMATION DISPLAYED ON THE SYSTEM. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE SYSTEM DOES NOT AND SHALL NOT SERVE AS THE PRIMARY BASIS FOR ANY DECISIONS MADE BY PARTICIPANT AND THAT OPTIONABLE IS NOT AN ADVISOR OR FIDUCIARY OF PARTICIPANT.

I believe the real issue for OPBL is weather it can attract/retain client given the non-stop negative PR. OPBL's management of the BMO fiasco has put serious doubts in it leadership and product. I suspect will be launching their own counter offensive very soon. It is questionable if it can be effective.

no position.

 
Optionable CEO Quits

By Mark DeCambre
TheStreet.com Senior Writer
5/14/2007 9:55 AM

Optionable (OPBL - Cramer's Take - Stockpickr) CEO Kevin Cassidy has resigned.

Day to-day management of the Valhalla, N.Y.-based electronic broker company will be assumed by Chairman Albert Helmig, according to a statement issued by the company this morning.
Optionable has been under significant duress over the past few weeks. Its shares, which have traded as high as $8.63 earlier this year, plummeted to $1.01 at the close of trading on Friday, after a series of setbacks.

BMO Financial (BMO - Cramer's Take - Stockpickr - Rating) -- Optionable's largest client, accounting for about 30% of its revenue in the latest quarter -- announced last week it suspended its business relationship with the trader. That move came just a week after the Toronto-based bank announced that it had incurred big losses on natural gas option bets.

Matters have only gotten worse for Optionable. Late last Friday, firm Sarraf Gentile announced that it had launched a class-action securities fraud suit in the U.S. District Court for the Southern District of New York. The suit names as defendants Optionable and some of its top executives.

In a statement, Helmig said, "in my new and expanded role as executive chairman I am going to assess the situation and guide the company accordingly."

The legal woes come as the New York Mercantile Exchange (NMX - Cramer's Take - Stockpickr) revealed a plan to compete with Optionable.

Nymex has a 19% stake in Optionable, which many observers believed meant that the exchange intended on either buying Optionable at some point or incorporating it into its own array of services. But Nymex's move to launch its own electronic service means that scenario is not likely. The Nymex service is expected to launch sometime in late June.

A spokesman at Florham Park, N.J.-based public relations firm Keating & Co., which Optionable hired for its crisis management capabilities a week ago, declined to comment.

Press Release Source: Schatz Nobel Izard, P.C.                                     


Law Firms Actively Pursue Class Action Against Optionable, Inc. -- OPBL
Thursday May 17, 3:15 pm ET


HARTFORD, Conn., May 17, 2007 (PRIME NEWSWIRE) -- The Connecticut law firm of Schatz Nobel Izard, P.C., along with New York-based law firm Sarraf Gentile LLP, are actively pursuing a class action against Optionable, Inc. (``Optionable'' or the ``Company'') (OTC BB:OPBL.OB - News) on behalf of all persons who purchased or otherwise acquired the common stock of Optionable between May 6, 2005 and May 10, 2007, inclusive, (the ``Class Period''). The action is currently pending in the United States District Court for the Southern District of New York at docket number 07-CV-3845.


The Complaint alleges that Optionable and certain of its officers and directors violated Federal Securities laws by making misleading statements concerning the Company's business prospects and growth. Specifically, throughout the Class Period, Defendants failed to disclose the following facts: (i) Optionable was engaged in improper deals with its biggest client, the Bank of Montreal (``BMO''); (ii) Optionable's business was extremely dependent upon BMO; and (iii) Defendants were able to retain BMO only because they helped its star options trader mismark options, falsify the trading price at which BMO traded those options, and hide massive losses incurred by BMO as a result of those trades.

On April 27, 2007, BMO announced that it had lost between $300 to $400 million on trades executed through Optionable. In response to this disclosure, the Company's stock dropped 33%. Then, on May 8, 2007, BMO announced it was suspending all of its business relationships with Optionable. Finally, on May 10, 2007, it was disclosed that Deloitte & Touche LLP had conducted an audit of the trades that BMO had conducted with Optionable and found there had been ``serious mismarking of the book of natural-gas options.'' On this news, the price of Optionable fell further to $0.84, representing a total drop of nearly 90%. During the Class Period, Optionable stock traded as high as $9.10 per share. Subsequent to the Class Period, on May 12, 2007, CEO Kevin Cassidy resigned.

If you are a member of the class, you may, no later than July 10, 2007, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).

For more information about the case, its claims, and your rights, please contact Schatz Nobel Izard, P.C. toll-free at (800) 797-5499, or by e-mail: [email protected] or you may contact Sarraf Gentile LLP at (212) 868-3610, or by e-mail: [email protected]. To view a copy of the complaint filed by Schatz Nobel Izard, P.C. and Sarraf Gentile LLP or for more information about class action cases please visit: http://www.snilaw.com.

Contact:
          Sarraf Gentile LLP
          Joseph Gentile
          (212) 868-3610
          Fax: (212) 918-7967
          [email protected]
          http://www.sarrafgentile.com

          Schatz Nobel Izard, P.C.
          Wayne T. Boulton
          Nancy A. Kulesa
          (800) 797-5499
          [email protected]
          www.snilaw.com


--------------------------------------------------------------------------------
Source: Schatz Nobel Izard, P.C.