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| User Info | Blatant Insider Call Buying (COMS) in forum [Ticker] | |||
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Genesis Posts: 71432 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1615-B....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-11-11 16:24:33
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Phirang Posts: 8824 Incept: 2008-10-25 
bar khoba's revenge
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Probably a merger arbitrage - were they short HPQ, too?
---------- The Treasury can issue debt on your behalf because the State can and will stomp the wealth out of you and your family.
2009-11-11 16:25:23
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Pojo Posts: 34 Incept: 2009-08-05
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see, most of the language in that ticker is over my head: i am not a trader, day or night. but i still know when someone is robbing the ****ing bank mother ****ers!!!!
2009-11-11 16:47:47
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Angel61 Posts: 602 Incept: 2008-10-13 
Texas
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>should by these $5 calls which should that be "buy"? and while I'm making a rare post in Ticker, thanks, Karl, for all of it. ---------- Breathe deep, the gathering gloom...
2009-11-11 16:50:17
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Andrew123 Posts: 107 Incept: 2009-07-05 California
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The bulk of the buying occured at noon. At the same time, 3100 of the dec 5 calls traded. My guess is that it was a delta neutral spread, so I doubt if the buyer made a huge profit (of course there is no way to tell what the buyer or the seller of the spread did afterwards, so no real way to tell).
2009-11-11 16:50:21
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Asimov Posts: 26714 Incept: 2007-08-26
east tennessee Online
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Interesting. 3269 front month 5's but there were also 3269 dec09 5's. Naw, couldn't have been the same person. Wonder why the 2657 jan10 5 puts? ---------- It's justifiably immoral to try to deal in a moral fashion with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
2009-11-11 16:59:15
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Bearshort Posts: 1953 Incept: 2007-09-13
NYC
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At least Bloomberg TV talked about the unusual options action and asks a analyst if he thought that looks fishy.
---------- The Fed has a vault full of Vomit!
2009-11-11 17:03:52
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Raingod Posts: 1067 Incept: 2008-08-29
Tastes Like Chicken
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Did the person BUY the puts, or SELL the puts? If he sold them, then they're going to be 100% wins.
---------- I have even intermittenter access than I did over the summer. No idea when I can check in.
2009-11-11 17:05:17
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Andrew123 Posts: 107 Incept: 2009-07-05 California
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Let me clarify. I believe the same person that bought the nov calls sold dec calls, so based on that trade alone, they did not make a huge fortune. This, by itself, is a lot less suspicious than it first appears (although as Gen notes, the open interest (number of contracts that have traded prior to this trade) was tiny (ie. this was not an actively traded option) so I do expect someone thought something was going to happen. Also, per fly on the wall (a news/rumor site covered by bloomberg and other news providers, Goldman Sachs was out yesterday telling clients that they cancelled an appearance at the Data Center Techtronics Conference, whatever that is, so maybe someone was taking a shot that there would be either good or bad news in the near future.
2009-11-11 17:14:30
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Waverider Posts: 2785 Incept: 2007-12-23 Chicago
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Markets may go up tomorrow on this fraud if coms announces layoffs ..
2009-11-11 17:40:57
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Imaboomerdropout Posts: 163 Incept: 2009-09-13
NY
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POJO You're not alone but one can get a hell of an education here. Glad I found this place.
2009-11-11 18:53:33
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End_the_bubbles Posts: 92 Incept: 2009-03-25 CA.
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Even the Dec 5's traded 16 times the open interest. December COMS 5 call option THQ LA 0.85 +0.20 3,269.0 Open Interest 210.00 Here is a WSJ story about it - http://online.wsj.com/article/SB10001424.... 3Com Trades Suggest Leak Of H-P Plans * NOVEMBER 11, 2009, 7:17 P.M. ET NEW YORK—The options market saw a rare burst of action in 3Com, several hours before Hewlett-Packard announced plans to buy the technology company for $2.7 billion. Trading in 3Com suggested some traders may have known about the deal before the formal announcement, options strategists said. "It could be that something leaked about this deal because someone buying those options for 60 cents, which could now be worth $2.60, could make four times their money, just like that," said OptionMonster co-founder Jon Najarian. A spokeswoman for Hewlett-Packard declined to comment. A representative for 3Com wasn't available for comment. Just a few hundred contracts on 3Com usually change hands on a daily basis. On Wednesday, however, the activity spiked to 13 times the normal level. Options traders scooped up large batches of near-term "call" options that allow them to buy stock in 3Com at fixed prices. Specifically, they gravitated toward November options that allow them to buy the stock for $5 a share, well below the $7.90 a share that H-P offered for 3Com. By the end of Wednesday's session, traders had picked up 8,000 calls in 3Com and just a handful of "puts," according to Trade Alert. Puts convey the right to sell a company's stock. Hewlett-Packard announced its plan to buy 3Com shortly after the session closed. The bulk of the day's action took place in 3Com's November $5 calls and its December $5 calls. The former set of options closed at 65 cents. At that price, the contracts start to make money once 3Com shares go above $5.65. The shares closed at $5.69, up 28 cents, or 5.2%. The largest deal in 3Com involved a lot of 1,900 November $5 call options. The trade took place around noon EST on the CBOE, according to Trade Alert. "I think it's obvious people were speculating here.People were buying [options], hoping something would happen," said William Lefkowitz, chief options strategist with of vFinance Investments. "Looking at the volume, it looks as though something might have leaked." Last modified:
2009-11-11 19:35:55 by end_the_bubbles
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Asimov Posts: 26714 Incept: 2007-08-26
east tennessee Online
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Quote:Did the person BUY the puts, or SELL the puts? If he sold them, then they're going to be 100% wins. There was a buyer and a seller... I really don't know how else to put that, I'm not trying to be a smartass here. ---------- It's justifiably immoral to try to deal in a moral fashion with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
2009-11-11 20:33:11
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Doctorbob Posts: 812 Incept: 2009-06-03 Gusher of black gold
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The SEC will do nothing; they are part of the criminal crime family. In January 1985, Michael Milken of Drexel Burnham Lambert was financing Victor Posner’s secret leveraged buyout of National Can. National Can was their client. During this, a slush fund run by Drexel employee Lowell Milken (brother to Michael) bought 54,200 shares of National Can, and then added 10,000 more on another day, then 21,300 on another, and finally 2,000 just before the deal was announced. The SEC was on the case within days. They were able to find out that the Milkens and fellow Drexel employees owned the slush fund and that the fund had never before owned any common stock. Yet, the SEC walked away from the case after concluding that the slush fund had “no known connections to National Can.”
2009-11-11 22:18:08
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Txdomer Posts: 968 Incept: 2007-11-07
Ding-dong, the Fed is dead!
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Doesn't this beg the question of what the hell the sellers of the calls were thinking?
---------- "Economics is not practiced as a science. Rather, it is a pretentious way to covertly promote political prejudices." - Fred Harrison http://renegadeeconomist.com
2009-11-11 22:28:16
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Asimov Posts: 26714 Incept: 2007-08-26
east tennessee Online
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Tx: If seller (or buyer, which is less likely IMO) was probably a MM that's fully hedged.
---------- It's justifiably immoral to try to deal in a moral fashion with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente. Last modified:
2009-11-11 22:35:27 by asimov
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Berkleyreindeer Posts: 560 Incept: 2008-07-22 Minneapolis , MN
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Asimov, MM's are usually partially hedged on illiquid options. Sure, they may have purchased some stock on a delta calculation, but that doesn't change the fact that if a criminal act profits $800,000, someone else is worse off by the same amount. "Who is it?" is not that important. Jane Doe can be murdered and her murderer get executed.
---------- It'll get worse. Just wait.
2009-11-11 23:29:32
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Mondocondo Posts: 3143 Incept: 2007-12-03
Miami
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Zero Hedge has an interesting theory, and of course, Goldman is involved: Goldman And The 3Com "Insider Trading" Connection Tyler Durden's picture Submitted by Tyler Durden on 11/11/2009 18:56 -0500 * 3Com * Calendar Spread * Goldman Sachs * hedge * Insider Trading Following up on our earlier disclosure about potential insider trading in 3Com stock, we have uncovered something interesting. Did Goldman (in)advertently tip off clients that 3Com was potentially in strategic negotiations? 3Com was previously supposed to present at Goldman's Data Center Techtonics Conference today at the Sheraton Hotel in New York (Agenda below). In a limited distribution note, Goldman yesterday advised selected clients that 3Com had withdrawn at the last minute from the Conference. As those in the industry are well aware, any last minute switches of this kind are indicative of imminent good or bad news dissemination, and more often than not are associated with some strategic announcement. While the person buying the calls (if indeed this was not a calendar spread) may have been provoked to do so as a hedge against anything crazy out of the firm, it is amusing that once again a very selectively disseminated piece of information to only Goldman clients may have been the driving reason for making markets "efficient." http://www.zerohedge.com/article/goldman....
2009-11-11 23:31:20
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Txdomer Posts: 968 Incept: 2007-11-07
Ding-dong, the Fed is dead!
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OMG, I was thinking Goldman must have screwed somebody on this one, but then I thought I was just being paranoid!Asimov wrote..Tx: If seller (or buyer, which is less likely IMO) was probably a MM that's fully hedged. I had no idea MMs sold options! How do you hedge selling options? ---------- "Economics is not practiced as a science. Rather, it is a pretentious way to covertly promote political prejudices." - Fred Harrison http://renegadeeconomist.com Last modified:
2009-11-12 00:22:52 by txdomer
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Ba Posts: 547 Incept: 2008-03-13
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mm = marketmaker, not moneymarket?
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2009-11-12 00:26:03 by ba
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Andrew123 Posts: 107 Incept: 2009-07-05 California
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I take back my prior posts. The nov calls have a higher delta than the Dec, so in order for this to be a delta neutral calendar spread, they would have had to trade more dec than nov options, which from the tape did not occure. The obvious answer which Gen poiinted to in his original post, that someone bought both nov and dec, means that the guys on the floor would have had to have been selling thousands of illiquid calls options at 8 cents over parity (stock was 5.57 when the options traded at .65 cents). I find it hard to believe they would have made such a sale, but I suppose stranger things have happened.
2009-11-12 00:35:59
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Analyzer Posts: 2240 Incept: 2007-08-22
Paradise
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Andrew: I was about to make a comment about your earlier post, but given your last response there is no need. No one would place this quarter of a million dollar bet, even if slightly delta neutral, on a minor hunch. They might do it on less than 100% certainty, but probably not less than 90% certainty... meaning they were in the know. The only doubt might be a small possibility of last-minute breakdown in talks or an unexpected reaction in the market to the news. Thus it is almost certain they bought both Nov & Dec calls. (IMO) The puts might be a hedge by the same party.... which could still come into the money on any break in the deal or other market activity! ---------- =========================================================== " October is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February." Mark Twain (1835-1910)
2009-11-12 05:15:05
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Asimov Posts: 26714 Incept: 2007-08-26
east tennessee Online
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Ba: Yea, market maker Berkleyreindeer: Good point, thank you. ============ Bloomberg was talking about this today. Surprised me. ---------- It's justifiably immoral to try to deal in a moral fashion with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
2009-11-12 07:18:50
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Josecitomadera Posts: 283 Incept: 2009-03-20 Miami
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ANDREW-I take back my prior posts. The nov calls have a higher delta than the Dec, so in order for this to be a delta neutral calendar spread, they would have had to trade more dec than nov JOSE-What is a delta neutral calendar spread?
2009-11-12 07:38:43
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Genesis Posts: 71432 Incept: 2007-06-26
KD^2
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Jose: Learn thy greeks 
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-11-12 08:35:04
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