Last night before the
close I received an instant message passing along mention of “an incredibly unusual trade”
in the options of Booz Allen Hamilton, ticker BAH—better known as the home of
government secrets-discloser Edward Snowden.
close I received an instant message passing along mention of “an incredibly unusual trade”
in the options of Booz Allen Hamilton, ticker BAH—better known as the home of
government secrets-discloser Edward Snowden.
Seemed that somebody had bought 7,600 worth of call options (equivalent to 760,000 shares of stock) in BAH, which normally trades fewer than 20 options on any given day.
Specifically, the buyer bought 7,600 worth of September $20 calls (the stock closed the day at $19.32) for 85 cents. “This name has LESS than 1,000 in total open
interest,” my messenger noted—meaning the buyer had just bought 7.6-times the
number of existing options of all stripes extant in BAH.
interest,” my messenger noted—meaning the buyer had just bought 7.6-times the
number of existing options of all stripes extant in BAH.
That, as I say, was
last night, not long before the market closed for trading.
last night, not long before the market closed for trading.
This morning, lo and
behold, the Wall Street Journal is reporting the following:
behold, the Wall Street Journal is reporting the following:
Accenture in Talks
to Buy Booz & Co.
An Acquisition Would Beef Up Strategy and
Operations Consulting
Unfortunately for the
massive call option buyer in BAH, “Booz & Company” is entirely different from “Booz
Allen Hamilton,” having been spun out some years ago as a private company.
massive call option buyer in BAH, “Booz & Company” is entirely different from “Booz
Allen Hamilton,” having been spun out some years ago as a private company.
Or, perhaps it’s highly fortunate that our option buyer didn’t finish listening to his (or her) tipster
before hanging up the phone and placing the order.
before hanging up the phone and placing the order.
Because if indeed
Accenture was in talks with “Booz Allen Hamilton,” Mr. 7,600 September 20 BAH Calls
might be getting a call of a different kind right about now, and it would not be pleasant.
Accenture was in talks with “Booz Allen Hamilton,” Mr. 7,600 September 20 BAH Calls
might be getting a call of a different kind right about now, and it would not be pleasant.
As it is, the buyer—who,
to be fair, could have had any number of reasons to make the trade (might have
been a short-seller looking to hedge a position prior to the company’s earnings
report this morning, for example)—can finish reading the Wall Street Journal
without interruption.
to be fair, could have had any number of reasons to make the trade (might have
been a short-seller looking to hedge a position prior to the company’s earnings
report this morning, for example)—can finish reading the Wall Street Journal
without interruption.
Jeff Matthews
Author “Secrets in Plain Sight: Business and Investing Secrets of Warren
Buffett”
Buffett”
(eBooks on Investing, 2013) $4.99
Kindle Version at Amazon.com
Kindle Version at Amazon.com
© 2013
NotMakingThisUp, LLC
NotMakingThisUp, LLC
The
content contained in this blog represents only the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and
clients advised by Mr. Matthews may hold either long or short positions in
securities of various companies discussed in the blog based upon Mr. Matthews’
recommendations. This commentary in no
way constitutes investment advice, and should never be relied on in making an
investment decision, ever. Also, this
blog is not a solicitation of business by Mr. Matthews: all inquiries will be
ignored. And if you think Mr. Matthews
is kidding about that, he is not. The
content herein is intended solely for the entertainment of the reader, and the
author.
content contained in this blog represents only the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and
clients advised by Mr. Matthews may hold either long or short positions in
securities of various companies discussed in the blog based upon Mr. Matthews’
recommendations. This commentary in no
way constitutes investment advice, and should never be relied on in making an
investment decision, ever. Also, this
blog is not a solicitation of business by Mr. Matthews: all inquiries will be
ignored. And if you think Mr. Matthews
is kidding about that, he is not. The
content herein is intended solely for the entertainment of the reader, and the
author.
2 replies on “And Speaking of Insider Trading, Did You Hear One About The Trader Who Didn’t Let The Tipster Finish What He Was Saying?”
That is special…
This is a clever post and name mix ups do occur (for example on ticker MCI when the company named MCI filed for bankruptcy. However, in this case as you mention BAH also was reporting earnings and the investment was profitable.