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Insider trade on Splunk acquisition?

(twitter.com)
417 points mkmk | 6 comments | 21 Sep 23 15:58 UTC | HN request time: 0s | source | bottom
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bryan0 ◴[21 Sep 23 17:23 UTC] No.37600873[source]▶
Can someone explain the mechanics of this specific trade to a noob? The trader bought 550k options yesterday for SPLK to hit $127/share? Since that seemed highly unlikely they were only priced at $.04 each. but now that SPLK is at $145/share they are worth $18 each? so that would be a profit of ~$10m?
replies(8): >>37600949 #>>37600955 #>>37600984 #>>37601085 #>>37601419 #>>37603104 #>>37603771 #>>37604273 #
1. mrb ◴[21 Sep 23 19:42 UTC] No.37603104[source]▶
Important note: he didn't buy 550k options, he bought 26k, for a total profit of $475k. The tweet is incorrect. See https://news.ycombinator.com/item?id=37602079
replies(1): >>37605230 #
2. vGPU ◴[21 Sep 23 22:21 UTC] No.37605230[source]▶
No. He bought 260 options, which translate into the right, but not the obligation to purchase 26k shares at a certain price.

260 options is WSB lotto territory. At $4 each, that’s a thousand dollar bet. We’re not exactly talking big money here.

replies(2): >>37605982 #>>37606210 #
3. vGPU ◴[21 Sep 23 23:43 UTC] No.37605982[source]▶
In fact, I was right. It was a WSB lotto trade. Guy is just a regular WSB trader who has made multiple trades on this ticker in the past.
4. mrb ◴[22 Sep 23 00:12 UTC] No.37606210[source]▶
I know it's 260 options, but I wrote "26k" as it's the right to buy 26k shares (1 option for 100 shares), for consistency with the parents who wrote 550k, meaning 5500 options to buy 550k shares.
replies(1): >>37606329 #
5. vGPU ◴[22 Sep 23 00:26 UTC] No.37606329{3}[source]▶
Correcting an error with an error, even for the sake of consistency, just perpetuates confusion. The average person probably doesn't even know what an option is, and your post could be read in multiple ways. He bought 26k options? 26k shares? $26k of either?
replies(1): >>37607126 #
6. mrb ◴[22 Sep 23 02:21 UTC] No.37607126{4}[source]▶
Ok, I agree with you.