Tuesday, September 22, 2009

Insider trading? Possibly

While the deal had been rumored, trading like this is at least suggestive of insider trading.

Deal Journal - WSJ:
"...it looks like somebody couldn’t keep quiet about the Perot deal, though it had been rumored to be in the works for many months. Dow Jones Newswires reports that starting Sept. 9 and continuing through Monday, traders bought and sold far more options in Perot Systems than they historically have.

Surprise, surprise. The bulk of the activity appeared to be bullish, with traders preparing for Perot’s stock to move higher. On Sept. 9, for example, traders picked up 2,000 calls that allow them to buy the company’s stock and just 11 puts that allow them to sell it, according to Trade Alert. Under normal circumstances, traders would buy and sell only a few hundred contracts in the Texas company."

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