http://www.reuters.com/article/idUSN3113988920101231
CHICAGO, Dec 31 (Reuters) - A number of well-timed bullish options bets appeared to have been placed on Imax Corp (IMX.TO) (IMAX.O) just days before a media report suggesting a possible buyout.
On that day, 5,000 March calls giving the right to buy Imax shares at $30 a piece were bought for a premium of 70 cents per contract. Tied to that position was a short sale of 115,000 Imax shares trading at $25.04 after midday, data from Trade Alert showed.
"The most suspicious thing about the trade is that it occurred during a slow week and that it was well-timed," Trade Alert president Henry Schwartz said.
Schwartz noted the trade also stands out during such a quiet week because it was more than four times the average daily call volume for Imax of 1,200 contracts.
The March $30 calls surged 500 percent in value after fetching a premium as high as $4.20 on Friday, according to Reuters data.
Based on Tuesday's position, the trader would reap an unrealized profit of about $915,000 based on Friday's midday quotes in options and stock," "The profits come from the gains on the call position minus the loss in the short sale of the stock."
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This is the smart way to do insider trading (if that is what it was). You have losses too, so you can claim it was a strategy and not special and illegal info....
CHICAGO, Dec 31 (Reuters) - A number of well-timed bullish options bets appeared to have been placed on Imax Corp (IMX.TO) (IMAX.O) just days before a media report suggesting a possible buyout.
On that day, 5,000 March calls giving the right to buy Imax shares at $30 a piece were bought for a premium of 70 cents per contract. Tied to that position was a short sale of 115,000 Imax shares trading at $25.04 after midday, data from Trade Alert showed.
"The most suspicious thing about the trade is that it occurred during a slow week and that it was well-timed," Trade Alert president Henry Schwartz said.
Schwartz noted the trade also stands out during such a quiet week because it was more than four times the average daily call volume for Imax of 1,200 contracts.
The March $30 calls surged 500 percent in value after fetching a premium as high as $4.20 on Friday, according to Reuters data.
Based on Tuesday's position, the trader would reap an unrealized profit of about $915,000 based on Friday's midday quotes in options and stock," "The profits come from the gains on the call position minus the loss in the short sale of the stock."
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This is the smart way to do insider trading (if that is what it was). You have losses too, so you can claim it was a strategy and not special and illegal info....
