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Do they keep the money if they get caught? If it’s the SEC, they directly can’t send someone to jail, only fine them? Is that right?
The SEC cannot but the DOJ absolutely can (and does).
In the Google Legal building, the department that dealt with acquisitions was behind a locked door. Most badges did not open it.
Can someone explain the mechanics of this specific trade to a noob? The trader bought 550k options yesterday for SPLK to hit $127/share? Since that seemed highly unlikely they were only priced at $.04 each. but now that SPLK is at $145/share they are worth $18 each? so that would be a profit of ~$10m?
You pretty much explained it yourself. The price of SPLK had no reason to jump to or beyond $127 without some catalyst event so the options were almost worthless. But with the acquisition, the stock had a catalyst and with the share price jumping to $145, those options gained a crap load of intrinsic value (basically the difference of $145 - $127). Now either the purchaser got really really lucky or had insider infor…
Most subtle Cisco joke in the whole thread. Hat tip.
Who is selling these options?? Talk about picking up pennies in front of a steamroller...
Can someone explain the mechanics of this specific trade to a noob? The trader bought 550k options yesterday for SPLK to hit $127/share? Since that seemed highly unlikely they were only priced at $.04 each. but now that SPLK is at $145/share they are worth $18 each? so that would be a profit of ~$10m?
Earlier quoted context omitted.
No explanation needed. You got it. An options contract gives you the right to buy or sell a security to a counterparty at a fixed price at any time on or before the expiration date. As you note, the chances of being able to buy a share from someone on or before Friday for $127 (when the stock was publicly trading below that) was near valueless ($.04). Not anymore!
Could you please explain more about who these counterparties are exactly? Do they include brokerages? I'm trying to understand why a counterparty would enter into an arrangement where a stock price change obligates them to financial liability like this. Presumably there's some upside if the stock price goes the other way, but it's unclear who the $ would come from in that case. Also: Who originates options? When some…
Let's say you live in front of the Splunk office, and you see tens of people in suits, a limo with a CISCO sticker, as well as a lot of commotion on the office in front of you. You strongly suspect something is happening, you buy $22k of Splunk calls. Is that insider trading?
Earlier quoted context omitted.
This is great, and as good a place as any for the thread to sprawl from, so I'll ask: it depends on how you know the stock is going to shoot up the next day, right? Trading on private information isn't illegal, and there's a huge variety of ways to acquire private information at varying levels of confidence, and in a sense the purpose of the markets is to aggregate everyone's private information to estimate a price.…
insider trade? Maybe not. Unethical? Yes. IANAL but this can be grounds for firing and potentially DataDog can sue for misusing what is effectively their confidential information.
Earlier quoted context omitted.
As in go to jail? I’m pretty sure yes.
You must be new to the United States. Only the poors go to jail (except in the most extreme cases like Epstein, and it still took them 20+ years to do anything to him.
It's absolutely mostly the poor who go to jail except a few fall guys - it's very apparent.
That's class privilege for you guys, and it has been like this for hundreds of years in most societies but only americans seem to "miss" this or whatever the hell is going on.
Just as here in the EU, fraud in elite circles shuffles billions every day while everyone focuses on petty crime and sensational cases.
Wars have killed millions for resource political gains and entire economies have been fucked over to benefit tiny circles of the richest - and none of these people have ever gone to jail.
The control that the uppermost echelons has over the flow of information in this new social cybernetic system we've all been forced into is so efficient, it's almost unbelievable lol.
Obviously I don't condone insider trading, but it's nice to see someone go all in and make some real money. If you're going to risk jail time, you might as well do it for life-changing amounts of cash. Contrast this with Stephen Buyer who's going to trial and may well end up in jail for a piddly few $100k.
On the contrary, to be a successful criminal you have to learn to stay under the radar. Yes millions might be available for the taking, but in doing so you will most certainly get caught. On the other hand no one will blink an eye at a trade that nets you a few hundred K, and that is still a significant amount of money.
I wonder if that's actually true for a normal person, or if automated analytics would be looking at the relative value of your portfolio rather than just looking for the biggest wins in absolute terms.