Suspicious Options Trading Preceded Both Monster Worldwide's and Dow Jones's Recent Run-Ups
http://seekingalpha.com/article/34469
Posted on May 3rd, 2007 with stocks: DJ, MNST
FP Trading Desk submits: According to Jim Cramer of CNBC's "Mad Money" television program, heavy activity in Monster Worldwide Inc. (MNST) stock options indicates that a buyout is in the works. On this afternoon's CNBC "Stop Trading" segment, Cramer commented by saying there must be a leak about a possible Monster tie-up with either Google Inc. (GOOG) or Gannett Co. (GCI) in the next month, hinting that such a deal could lead to a share price of $60. The stock closed higher by $3.80, or 8.63%, to $47.83 on heavy volume of 18.59 million shares, compared to daily average trading of 2.91 million shares. A quick check at the option volume for May and June calls with strike prices between $45 and $55 per share shows a tremendous amount of activity, a sure sign that investors are betting on a higher stock price.
What's interesting is that the Monster options activity is quite similar to trading in options to buy shares of Dow Jones & Co. (DJ) before it was announced Tuesday that Rupert Murdoch's News Corp. (NWS) would launch a $5 billion bid for the company equating to about $60 per share. At the time, Dow Jones shares were trading barely above $36. According to Bloomberg, no more than 728 call-option contracts on Dow Jones shares had traded in a single day in April. However, options trading volume shot up to 3,029 contracts on April 25, substantially higher than the 20-day average of 309 contracts, days before the bid was disclosed. Following Murdoch's announcement, some of those contracts have appreciated by as much as 48 times their original value. Regulatory authorities including the Securities and Exchange Commission and the Options Regulatory Surveillance Authority will no doubt be looking at these suspicious trades to determine if there has been any insider trading.
http://seekingalpha.com/article/34469
Posted on May 3rd, 2007 with stocks: DJ, MNST
FP Trading Desk submits: According to Jim Cramer of CNBC's "Mad Money" television program, heavy activity in Monster Worldwide Inc. (MNST) stock options indicates that a buyout is in the works. On this afternoon's CNBC "Stop Trading" segment, Cramer commented by saying there must be a leak about a possible Monster tie-up with either Google Inc. (GOOG) or Gannett Co. (GCI) in the next month, hinting that such a deal could lead to a share price of $60. The stock closed higher by $3.80, or 8.63%, to $47.83 on heavy volume of 18.59 million shares, compared to daily average trading of 2.91 million shares. A quick check at the option volume for May and June calls with strike prices between $45 and $55 per share shows a tremendous amount of activity, a sure sign that investors are betting on a higher stock price.
What's interesting is that the Monster options activity is quite similar to trading in options to buy shares of Dow Jones & Co. (DJ) before it was announced Tuesday that Rupert Murdoch's News Corp. (NWS) would launch a $5 billion bid for the company equating to about $60 per share. At the time, Dow Jones shares were trading barely above $36. According to Bloomberg, no more than 728 call-option contracts on Dow Jones shares had traded in a single day in April. However, options trading volume shot up to 3,029 contracts on April 25, substantially higher than the 20-day average of 309 contracts, days before the bid was disclosed. Following Murdoch's announcement, some of those contracts have appreciated by as much as 48 times their original value. Regulatory authorities including the Securities and Exchange Commission and the Options Regulatory Surveillance Authority will no doubt be looking at these suspicious trades to determine if there has been any insider trading.
