Tonight we witnessed a watershed event in financial blogging, and it concerns The Case of Who Front-Ran the 3Com Takeover.
By now, the only people out there still trying to use options contracts to profit from inside information are the brain-dead and the citizens of non-extradition countries. As is well known, I am a huge proponent of the financial blogosphere and this evening’s 3Com options bust just gave me goosebumps.
The story is this:
At 4pm, shares of telco equipment company 3Com (COMS) were halted followed by the announcement of an acquisition by Hewlett-Packard at a 40% premium. The financial blogosphere sprang into action, immediately pointing out that today’s trading volume in 3Com’s options was triple its 4-week daily average. Options are the weapon of choice for the inside information crook as they give you the most bang for your buck on a near-term jump in a stock.
OptionMonster.com’s Jon Najarian picked this 3Com options activity up, probably first, and posted the below via Twitter: