Options Market Saw Increased Action In Perot Before Dell Deal
21 Septiembre 2009 - 1:23PM
Noticias Dow Jones
Days before Dell Inc. (DELL) announced plans to buy Perot
Systems Corp. (PER), the options market played host to rampant
trading in Perot, suggesting some traders might have anticipated
the news.
Starting Sept. 9 and continuing through Monday, traders bought
and sold far more options in Perot Systems than they historically
have. And the bulk of the activity appeared to be bullish, with
traders preparing for Perot's stock to move higher.
On Sept. 9, for example, traders picked up 2,000 calls that
allow them to buy the company's stock and just 11 puts that allow
them to sell it, according to Trade Alert.
Under normal circumstances, traders would buy and sell only a
few hundred contracts in the Texas company.
On Monday, following Dell's announcement, the activity is even
more robust. Trading has popped to 29 times the normal level, with
investors picking up 13,000 calls and 1,000 puts. A bulk of the
activity is taking place in October $20 calls. Priced at $9.60, up
from just 55 cents on Friday, the contracts make money if Perot
Systems' stock rises above $29.60 before Oct. 16.
Perot Systems' stock is trading near that level, recently going
for $29.58, up 65.2%.
Earlier Monday, Dell said it agreed to acquire Perot for $3.9
billion, or $30 a share.
When a company's options spring to life in the days or weeks
before a buyout deal is announced, it suggests that some traders
expected the news to come out.
"The increased options activity before an announcement comes out
suggests that it was leaked," said William Lefkowitz, an options
strategist with vFinance Investments. "It's pretty obvious that
something got out there."
The options market routinely plays host to buyout rumors,
largely because options provide a relatively cheap and easy way to
speculate on deals taking place.
The activity in Perot went largely unnoticed, however. That's
partly because the company's options are not traded all that often,
Lefkowitz said.
A spokesman for Perot was unavailable for immediate comment.
-By Tennille Tracy, Dow Jones Newswires; 212-416-2183;
tennille.tracy@dowjones.com