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
—

Andrew Keene
President/Founder KeeneOnTheMarket.com
Andrew@KeeneOnTheMarket.com
312-576-3210

Governments continue to apply the only solution they know, which is to print money in order to prevent their economies from completely collapsing.  But money printing will not save any of these desperate countries. March could be the turning point for the equity markets as we go into the debt ceiling and sequestration debate. This will definitely bring volatility back into market with potential for silver and gold to break out from their recent lows.

History shows a 1/16 ratio within Gold and Silver, which actually is based on the natural availability of the two metals in the soil of the earth. This simply means that there is 16 times more Silver than there is Gold available. Looking at the prices in today’s market gives you a 1/53 ratio which gives Silver historically seen a huge potential to the upside.

Industrial wise companies experiencing huge shortages in the Silver market. Just to mention to two most frequent cases of shortages in the Silver market:
– An Apple contractor who claimed that Apple has delayed production on the new 27″ iMacs due to an industrial silver shortage in China.
– One of the most famous German automakers is hoarding massive amounts of physical silver inside one of the most secure vaults in Zurich, Switzerland.
All this for the simple reason that Silver is not a “Just In Time” product anymore. 

It doesn’t really matter how much manipulation or money printing is surrounding our economy, because it is fundamentals that will prevail in the very end . My personal target for Silver into 2013, taking into accounts all of the above fundamentals, will be to take out the highs of 2011 and from there it will continue to go higher above that $48 high in order to set new highs. For Silver to go back at its fundamental historical ratio it needs to get to $100 per ounce, based on current levels.

For more information regarding the Silver and Gold market and their fundamental relationship with the economy, search the following names as they are professionals fluent in the market: Eric Sprott, James Turk, Egon von Greyerz and Peter Schiff. 

Looking at the 5 year chart of Silver ETF SLV will give you a strong uptrend into the future. Right now we are testing the lows on that trend, but with the RSI in oversold territory there is a higher probality of bouncing of these lows right back to the resitence level of $31.50 

—
Sven Tongeren
KOTM Contributor
sven@keeneonthemarket.com

The 6 months chart will give a more sophisticated view. We need to hold that red support line in order to continue the upward trend.

Paper bought 4954 SMH March 35 Puts for $.45 (3.4 times usual volume) when stock was trading $35.54
Paper bought 1232 SFH March 8 Puts for $2.30 (2.3 times usual volume) when stock was trading $8.28
Paper bought 20,000 CIM March 3 Puts for $.10 (4.6 times usual volume) when stock was trading $3.06
Paper bought 3600 LAMR March 40 Puts for $.40 (6.5 times usual volume) when stock was trading $45.22
Paper bought 4166 XCO June 6 Puts for $.50 (4.5 times usual volume) when stock was trading $6.47

Paper bought 2000 NBL March 110 Calls for $3.80 (2.8 times usual volume) when stock was trading $111.85
Paper bought 4330 AVGO March 37.5 Calls for $.80 (6.1 times usual volume) when stock was trading $35.66
Paper bought 1500 APH Feb 70 Calls for $.70 (5.4 times usual volume) when stock was trading $70.58
Paper bought 750 WLK July 86.25 Calls for $10.40 (3.1 times usual volume) when stock was trading $91.77
Paper bought 4000 SKS Aug 12 Calls for $.75 (5.5 times usual volume) when stock was trading $11.24

Paper bought 20,595 HLF May 22.5 Puts for $.90 (5.6 times usual volume) when stock was trading $43.44
Paper bought 25034 TJX Feb 45 Calls and Sold March 45 Calls for $.80 Credit (14.2 times usual volume) when stock was trading $45.13
Paper bought 1700 APA Feb 75 Puts for $.02 (2.8 times usual volume) when stock was trading $77.69
Paper bought 4500 SKS Aug 12 Calls for $.75 (5.5 times usual volume) when stock was trading $11.24
Paper bought 20,000 CIM March 3 Puts for $.10 (4.6 times usual volume) when stock was trading $3.06 

Today BRK decided to announce their intention to purchase HNZ . The deal sums to 23 billion and involves both BRK and G3 capital. Furthermore, the firm is estimated to be taken out at $72.50. HNZ is the maker of the iconic red ketchup and Ore-Ida fries. Shares are currently trading above the proposed deal price, which could imply that other firms may be interested in jumping into the bidding action.

The lead bankers are JPM, LAZ and WFC.  The increase in financial activity can also mean larger fees for the investment banks, for in M&A it is feast of famine.

In related news, many other deals have gone through. DIS recently inked a deal with  NFLX. And  just this week, cmcsa and GE  finished talks about NBC universal.

—

Mark Salerno
salerno.mark.a@gmail>