I perused the options trade from Friday (the trading pre-announcement), and was surprised what I found. First, let's look at "average" behavior for the stock. A snippet of the Stats Tab is included (click to enlarge).
So the company averages 107 contracts traded a day; of which 65 are calls. Here's where it gets fishy. I took a look at the Time & Sales for Friday; all option trades >= 25 lot. The results are below (click to enlarge).
What do you know - there were 11 trades and each trade was the Aug 17.5 calls. In total, 760 traded. Granted this isn't a huge trade, but keep in mind, the average across all strikes is 65, so 760 is ~ 1,200% the average.
The 760 calls bought for an average price of $0.30 are now worth $4.25 in parity. That's 1,317% gain in one weekend or just over $300,000 on a $22,800 bet. Hmmm...
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when were the news announced? cause i see a jump in the stock price on last minutes (starting about 15:18)on Friday, probably it's not an insider, but just a quick guy?
ReplyDeleteMaybe; the trades all occurred in an 18 minute window. 15:16 - 15:34 EST.
ReplyDeleteWhat about 3Par, it had some call volume before takeover.
ReplyDeleteI didn't see anything unusual. What do you see?
ReplyDeleteQuick guy? I think not, because the window of time allowed much more purchases, than was actually executed. Seems much more like not wanting to draw attention to me. They left profits on the table be cause... why? If you are quick with news then you take them to the woodshedder, in other words, more than 760 calls would have traded.
ReplyDeleteInteresting to see developments.
total open interest at the aug 17.5c line only increased by 312 contracts, so does that make your $300K estimate incorrect?
ReplyDeleteMaybe a little; the point is that a bunch of calls were opened.
ReplyDeleteI see stock price jump at 15:13 on a one-minute chart for that day. Seems like speculative momentum options traders to me.
ReplyDelete