If you’re an FX trader you are probably asking “What took so long?”
For others, though … here is an interesting little item.
- Two minutes before 10 a.m. ET on Thursday, one options trader bought 500 weekly 30-strike calls in Sodastream for 15 cents each (or $15 per contract, given that each contract controls 100 shares) that expire Friday
- Reason those options were so inexpensive is that the stock was trading at about $29.50 at the time, meaning the chance of the stock closing Friday above $30 was considered to be especially low
- Then, shortly before noon, Bloomberg reported that the company is in talks with an investment firm about taking the company private. After a halt, the stock sailed as high as $36.
- The news created an instant windfall for the trader, as these options, which were bought for $7,500, became worth as much as $250,000.