In trading there’s lucky, there’s good, and there’s trading that looks so outlandishly crooked that it would be shocking if it weren’t illegal.
Into the last group we can lump call trading activity in Inhibitex (INHX) last Friday. The maker of Hepatitis C drugs, INHX was purchased over the weekend by Bristol-Myers Squibb (BMY) for $26 a share, a greater than 150% premium from where the stock was trading Friday.
The news apparently didn’t come as a shock to one options trader who was fortunate to get long 2,000 INHX $10 calls at $2 per; a position twice the size of the average daily volume of INHX calls. Breakout welcomed Dr. J, Jon Najarian, the co-founder of TradeMonster.com to discuss the INHX trade and help viewers find some other ideas ahead JP Morgan’s (JPM) always huge annual Healthcare Conference.
Najarian’s firm picked up the unusual action in INHX calls last Friday, ahead of the buyout news. No doubt to the chagrin of the rather ham-fisted call buyer, users of the TradeMonster service were already clued into the strange movement before the deal was announced Saturday.
Without pointing fingers the man known as
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