Monsanto is soaring some 16% this morning on the heels of two possible takeover reports.
after the bell yesterday
| BASF weighing potential Monsanto takeover, StreetInsider says | |
| BASF (BASFY) is working with investment banks to consider a potential takeover of Monsanto (MON), reports StreetInsider, citing sources. Shares of Monsanto are up 1.6% in after-hours trading following the report. | |
before the open this morning
| Bayer exploring bid for Monsanto, Bloomberg reports | |
| Bayer (BAYRY) is said to be discussing a potential bid for Monsanto (MON) internally and with advisors, according to Bloomberg. :theflyonth
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Each of these came after a bevy of unusual option trades hit the tape for Monsanto.
It's one thing for an option trader to go out a few weeks or months on an option trade with the expectations of the company being bought out. It's an entirely different one to be buying tens of thousands of $$$ worth of out of the money options that are set to expire with in days.
The trader(s) involved in these MON trades weren't looking for the buyout news to come within the next few weeks or months, they were trading for it to come within the next day or two. Lucky for them it came right after the closing bell. Just a lucky guess.
AS such these traders stands to make hundreds of thousands of dollars this morning.
Yesterday just when the lunch time hour began, the bulk of the action picked up. I pointed the action out in our new option data live room:
The action also leaked to the $100 calls. Mind you the stock was as $91 at the time. Someone was betting a stock that had traded in a $3 range for 7 sessions was suddenly going to break higher in a big way and it was going to happen in the next two days.
The total of the big bets was over $50k. The odds of that $50k going to zero were great, but for those in the 'know' that $50k was a ticket to a possible million dollar payday.
We will find out exactly how much those insiders reaped when the bell rings at the open this morning.
It is also another reason to keep an eye for unusual option action. Our premium feature hit the ground this week. It's already off to a great start.