Big Call Buy on Energy Transfer Equity Just Before Pipeline Announced (ETE)

A “well informed” investor bought a ton of Energy Transfer Equity (ETP) Jan 60 calls this afternoon, just before the company announced a 1,100 mile crude oil pipeline project. Coincidence?  We think not.  The investor must have had his crystal ball working well when he bought 3,726 of the JAN $60 calls just around 2pm.

After hours Energy Transfer Equity Ltd announced that it’s board of directors had approved the construction of a 1,100 mile oil pipeline from North Dakota to Patoka, IL.  From there the oil connects to their Trunkline pipeline to carry on to the Gulf coast.

It’s these kind of options trades that leave you wondering that the SEC is up to with it’s surveillance and enforcement of insider trading.  Of course, we are just sour as we didn’t see this trade soon enough as we were asleep at the wheel.  This kind of trade is one of our sweet spots if we catch it in time.

Energy Transfer Equity (ETP) ended the day down 17 cents at $57.99, after spiking in the early morning to over $60.50.  That spike was a result of a price target hike to $60.00 by Credit Suisse.  With the after hours pipeline announcement, ETE is up $1.36 to $59.35.

The call buyer bought in before 2pm at around $3.50 making this a rather hefty “bet” of $1,300,000.  If the after hours gains keep in the morning those calls should be trading up about 1.40, making for a very quick profit of $521,000.  Not bad for a couple hours time frame.

***UPDATE:  Looks like we didn’t do our research.  It was just a 25 share trade at $59.35 at 4:39 pm, likely just a late print/correction from this morning’s spike.

Here’s the chart on Energy Transfer Equity (ETE):