Unusual option action in Imax before bid report

Discussion in 'Options' started by Pekelo, Jan 1, 2011.

  1. Pekelo



    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."


    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....
  2. Just do the option trade from a country that doesn't view "trading on inside information" as being a crime. :cool: :(
  3. Actually, just get elected to Congress.

    "..... it's perfectly legal for members of Congress to trade on information they gather about companies in the course of their work.

    "..... research suggests that the average member of Congress earns 25 percent higher returns on their investments compared to the average investor."
  4. 1) Too many GS alumni are infesting Congress?
    2) Regarding that 25% higher "number", are a few people earning gigantic returns to "skew" the average higher while most people earn "average" rates of return? :confused: :( :eek: :D :cool: :p :) :mad:
  5. these guys going back after the fact and culling trades is pretty much bullshit.

    there might have been 200 trades like that on stocks that didnt move an inch,

    if this is such predictive information, then the scanner sellers would be billionaires by now.

    more noise for the suckers.
  6. that shut em up