Suspicious options activity has raised its ugly head once again in the wake of corporate M&A activity. This time the target was the LinkedIn (LNKD) / Microsoft (MSFT) deal that stunned the market this morning. It’s somewhat naive to believe that the staggering $26.2B cash deal could proceed without some leakage ahead of the announcement. As usual, that leakage appeared to manifest itself in some unusual options activity.
As first reported by Fortune, the August $160 call volume spiked to 621 contracts on Friday while the August $175 call spiked to 331 contracts – both well over the ADV for each strike. The net outlay for the $160 calls was $135,100. Following the announcement those same calls are currently valued at over $2 million. Stay tuned to the live stream of The Option Block at 3pm Central where we’ll discuss this story and explore more unusual activity from the world of options. You can access the live streams of all Options Insider Radio Network programs here: http://mixlr.com/options-insider.