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A comment on Cisco Acquires Splunk. Parent comment

Re:Cisco Acquires Splunk by mmahemoff on Thursday September 21, 2023 @08:28PM (#37606341)
They bought $127 call options (the right to sell Splunk at $127) while Splunk was valued at $119 and the options were due to expire in one day. That's a cheap option to buy, given the improbability of a sudden jump like that.

The only way the buyer could make a profit would be for Splunk to go higher than $127 and if it went significantly higher, they'd stand to make an eye-watering return-on-investment multiple in one day. Which is what happens.

It would be suspicious if this turns out to be a speculative trader making a one-off transaction.

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Re:Cisco Acquires Splunk by arcticbull on Thursday September 21, 2023 @08:32PM (#37606386)
> the right to sell Splunk at $127

Calls are the right to buy at $127 - the shares received can then be sold at market price.

Puts are the right to sell at $127 - the short position can then be closed by buying at market price.

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Re:Cisco Acquires Splunk by dang on Thursday September 21, 2023 @10:49PM (#37607284)
We did a s/sell/buy/ in the GP by the author's request. Thanks!
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