Also, if this trader knew a deal was going to happen, why buy the June options, if a deal is done, he could have made more money if he traded the Feb or March Options instead. These were the 4 biggest orders across all exchanges in the last 10 days before the deal. As you can see the March 60 puts were bought for $.725. This is the kind of trade you could see if a trader had inside information. A trader will buy puts and buy stock in order to avoid being flagged by the SEC. This has happened many times in the last 6 months in STZ and JOSB where a trader bought puts, yes puts not calls and the stock continued to rally to the upside. The trader that bought calls ahead of this announcement is one of two things, naive or lucky. In the LIVE Trading Room http://bit.ly/108XTgh I go over and analyze these trades, because these are the types of trades that I saw from the trading floor for over 10 years. So, was there unusual options activity, yes the days that the June 65 Calls were bought it was around 4.5 times usual volume, but it was not necessarily a terribly out of the ordinary event. So is it likely that the trader that bought the calls had inside information? I think not. I think that the trader that bought the Puts might have known something, but as I watch 2,000 plus trades a day, these trades are all based on some information, knowledge, or ideas that the public might or might not know. It is easy for those in the media to find a trade that could be considered suspicious ahead of a big announcement or deal. Very similar to holding on the NFL, it could be called every play, but then again you can always find a statistic on a statistic. So, I will continue to trade and make money trading from the Whales, because yes they do know more. For more information about interviews on phone and radio about this topic, please email me: andrew@keeneonthemarket.com or call at 312-576-3210.
(From Trade Alert)
1000 HNZ Mar13 60.0 Puts $0.75 ASK CBOE 13:53:55 IV=11.7% +0.8 PHLX 592 x $0.65 – $0.75 x 97 ARCA Vega=$7590 HNZ=60.83 2/7 Thu
750 HNZ Mar13 60.0 Puts $0.70 ASK PHLX 09:56:13IV=12.0% +1.1 PHLX 470 x $0.60 – $0.70 x 808 PHLX Vega=$5699 HNZ=61.01 2/7 Thu
422 HNZ Jun13 65.0 Calls $0.35 ASK CBOE 13:58:12IV=12.7% +1.2 ARCA 29 x $0.25 – $0.35 x 448 AMEX OPENING Vega=$3642 HNZ=60.80 2/13 Wed
278 HNZ Mar13 60.0 Puts $0.75 BID BOX 10:07:43IV=11.3% +0.5 BOX 278 x $0.75 – $0.80 x 308 CBOE Vega=$2153 HNZ=60.79 2/5 Tue
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Andrew Keene
President/Founder KeeneOnTheMarket.com
Andrew@KeeneOnTheMarket.com
312-576-3210