Fishing Trading in ArcSight? (ARST)
The last few minutes of trading in ARST today were fairly violent with no apparent news. The stock fell from 37.75 all the way down to 34.40ish after hours.
What strikes me as interesting is the timing of decent sized OTM put purchases this morning, and large amounts of in the money calls sold the split second a Deal Reporter wire hit states “strategic buyers are no longer interested”.
The 30 and 35 puts Oct and Sept are both up 100%, pretty good trade if you can time the the trade perfectly, and not to mention a lot of blind risk. The open interest will tell the story tomorrow…
Lets analyse this a bit more… As you can see from the chart above the stock spiked in mid afternoon paring its losses, so those calls purchases made money, on the BS ramp obviously related to this news story considering no other news at hit.
Kinda funny how someone bot September 30 puts in blocks of over 150 contracts this morning around 11 eastern and as well as sold 37.5 calls with stock at 37.21 the split second a news story, which happens to be a subscriber only only service; announces “strategic buyers are no longer interested”. This news of course will crush a pumped up stock… To their credit this stock actually has been in takeover chowders, but the timing of put purchases and the stock dropping 6% is interesting, about a 3 second period of time. Who knew to sell the calls and buy OTM puts at the exact strike which went in the money briefly, the 35?
One can argue lightning fast timing and trade execution.. but come on..