That news article about the puts today is one day late. The 12000 puts were yesterday, not today; and 10500 were on, I believe, the 4's, not all 12,000 together on one strike. And last week, of course (as discussed already on this board), were the 10000 calls on, I believe, the 5's or 6's (could've been 7's)..
The call trade and the put trade yesterday are bullish, I now believe.
Forgetting the put trade for a moment, I tried to figure out the play on the 10,000 calls last week. Were they a hedge for a short? Were they a straight naked sell? Were they a buy? Think of a being short 1,000,000 shares, and buying a hedge. They could be short ( and now well into the money) at the strike they sold at. It can't be a straight naked short on that many calls. That would be dumb, dumb, dumb..And it wasn't insider info ont he Aetna news, cuz the strike was too far out (plus, they did not sell).
But, with yesterday's "short" (so we believe) of the puts (I believe it was a short, as the article states), and the 10,000 calls the other day, I now believe someone is fully in the BULL camp for 1,000,000 shares.
By the way, any HGSI'ers here?
The action on HGSI was exactly like this before the buyout.
I was sorely bummed with the GSK offer HGSI rec'd. Barely recouped..
You gotta figure, if DNDN surprises at the next ER, and a trend then becomes apparent, the cost of a takeover goes up exponentially. I mean, c'mon, an approved drug, getting expanded ins. coverage, a great pipeline, and a suspicion that Prov might have other indications.....
I personally suspect that DNDN gets an offer before the next ER, while the price is "kept" depressed (at a very high cost).
No problem. The greater the short ratio, the bigger the pop when the time comes. The problem with keeping the stock this cheap is that you are eventually forced to hedge your short, and selling already cheap shares. Twice the cost, you might say.
If this goes much lower, I'll eat my hat. And I have some nice ones. One is like a woven grass Bahama hat. I've eaten a lot of them in the past.