It’s a boring flat day in the overall markets, but the insider options players are always here to make things interesting in the options market. There have been several unusually large call trades so far today, including an unusual amount of call buys in Brocade Communications Systems (BRCD).
One of the most interesting trades was in Brocade Communications Systems (BRCD). A trader bought a crap ton of calls in the November $12 calls, and that there is some serious conviction, right before it was announced that the company was looking to sell itself soon (of course, if it was insider trading, there wouldn’t be any conviction, as the SEC is ball-less when it comes to this common scenario). This “smart money” trader has plenty of time for his “wager” to pay off with some great news that has yet to be released to the public. The interesting thing is that Brocade Communications Systems (BRCD) reports earnings November 21, 2016, AFTER the options expire. I’d wager that some surprise upside will come before that earnings release. It’s a very good chance that buyout price will be well above @$12.
BRCD is up $1.95 today or a staggering 22.32%, with the bulk of that upside coming at the time of the insider call option buy, around . Volume is actually light relative to it’s average daily volume of 1.5 million shares. It’s traded just 527,000 so far today. B/E Aerospace (BEAV) does present at the Jefferies Global Industrials Conference on Wednesday August 12, so it could be that news has leaked ahead of that.
Brocade Communications Systems (BRCD) has a consensus rating of Hold, and a price target of $10.25, but if this options action on BRCD today is any indication, that price target is a little low.
Brocade Communications Systems (BRCD) has a 52 week low of $7.40 and a high of $10.92.