←back to thread

Insider trade on Splunk acquisition?

(twitter.com)
417 points mkmk | 1 comments | 21 Sep 23 15:58 UTC | HN request time: 0.208s | source
Show context
xyzelement ◴[21 Sep 23 16:54 UTC] No.37600439[source]▶
I don't know if this is genuinely suspicious or not. Is buying 20K of options an unusual thing? Or is this something that happens regularly with options expiring worthless or with a small gain - and it just happened to hit big this time?

IE "someone bought a lottery ticket and won" - interesting to know if they play the lottery every other day (and don't usually win?)

replies(3): >>37600544 #>>37600565 #>>37600948 #
dtnewman ◴[21 Sep 23 17:02 UTC] No.37600565[source]▶
It's definitely suspicious and will probably be looked into. If it turns out it's a trader who regularly buys soon-to-be-expiring option calls, maybe it'll fly. But if the trade was made by someone who doesn't regularly make $20,000 options bets, they will need a good explanation.
replies(1): >>37601552 #
frontman1988 ◴[21 Sep 23 18:08 UTC] No.37601552[source]▶
Why will they need a good explanation? Can't they just say I lucked out and the burden of proving insider trading would fall on the SEC? Innocent until proven guilty right?
replies(5): >>37601679 #>>37601689 #>>37601777 #>>37601821 #>>37601916 #
1. WJW ◴[21 Sep 23 18:17 UTC] No.37601679[source]▶
If they did not usually trade in such options but suddenly started doing so the day before it had a major market-moving event, that could be the type of "reasonable suspicion" that you need to get a search warrant from a judge. From there on, investigators could demand access to (say) electronic communications to determine if the person doing the trade got a text from a friend saying "yo buy 20k of short term call options on Splunk you won't regret it bro" or something similar.

Especially if the person doing the trade is found to be employed by (or closely related to someone employed by) Cisco or Splunk or one of their banks.