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Insider trade on Splunk acquisition?

(twitter.com)
417 points mkmk | 1 comments | 21 Sep 23 15:58 UTC | HN request time: 0.209s | source
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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. gituliar ◴[21 Sep 23 20:24 UTC] No.37603771[source]▶
I'm not sure this is a true story.

Open Interest is 420 contracts, this is a max number of options someone can hold (for that strike and expiry). See the first line on the first screenshot, just below "Historical Volume / OI". Nobody could hold more than that much contract.

Edit: The total contracts is 127, so it gives 127 x $18 x 100 ~ $230'000 profit. (Seems like the post on Twitter is missing x10 factor.)