I noted last week, when the offer materialized, that someone had sold an awful lot of puts (that would become worthless) the day before. In other words, someone knew. My sentiment, or "take" on it, if you will, was reiterated in a news story a few days ago, mentioning the same selling of options.
Yesterday and today, I noted that someone is piecing together a massive bull spread. We're not talking mom and pop here. We are talking a major player; probably a hedge fund.
Bottom line, and without boring you with the details, someone today is buying major calls, and is paying for them by selling massive puts (yesterday).
Someone with a lot of money is betting that this deal gets done. In my opinion, they think it gets done above $60.
Just my take.
Good luck to all in this filthy racket we call the stock market.
If you note the open interest on the day the transaction was made and then on the next trading day, check the open interest, you'll know how many options were bought. If the open interest has increased by x, then x options were bought.
well unless you are actually watching the individual strikes on those options plays, you can't really see if it's one trade or not. but when you see a similar number of contracts in the same expiration month at different strikes, it seems logical that they are together.
case in point, 5,000 contracts in april at the 47 call, 43 puts. seems like someone is making a directional play.
It would be interesting to see how FDO would have traded without the mini correction the overall market has been in.
Anyone long FDO from last week is up big after the Peltz announcement and probably looked to take profits where they had them. Similarly, the mini correction flushed out the weak hands who had bought after the Peltz announcement.
I actually bought at 53.50 and sold at 52.50 and have been buying back in on each dip below 50. I also bought some NDN in the low 16's yesterday and today.
I think in the short term one of two things will happen:
1) Peltz makes another filing showing that he has increased his stake in the past few days.
2) WSJ or Dealbook report that a PE firm or two is weighing a rival bid to Peltz.
Peltz strategy is no different than Icahn's strategy with MENT. I wrote about it the day Peltz announced the deal. There is no way that he will buy the company. He put the company in play with the $55 bid and hopes that another bid emerges in the 60-63 range.
One of these days FDO will spike back up to the 53-54 range and then it probably sits in that range for a bit pending news.