Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Insider trade on Splunk acquisition?

twitter.com

Post reply on HN
Print view View original

321–330 of 371 posts

Re: Insider trade on Splunk acquisition?

#321

Post by maximinus_thrax »

sokoloff wrote: post #7
jkubicek wrote: post #6

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.

I expect this trade will indeed change the trajectory of their life.

Unless the trader is a lawmaker (or their family) who found out about this through the nature of their job. Congress is more-or-less exempt from insider trading laws if the information is acquired as part of their job.

Re: Insider trade on Splunk acquisition?

#322

Post by maximinus_thrax »

AlbertCory wrote: post #106

In the Google Legal building, the department that dealt with acquisitions was behind a locked door. Most badges did not open it.

> a locked door.

That's not a very efficient way to stop information leaks. It's not like ones and zeroes are delivered through open doors..

It will work against Big Bad Wolves, especially if your house is made of bricks.

Re: Insider trade on Splunk acquisition?

#323

Post by AlbertCory »

maximinus_thrax wrote: post #322
AlbertCory wrote: post #106

In the Google Legal building, the department that dealt with acquisitions was behind a locked door. Most badges did not open it.

> a locked door. That's not a very efficient way to stop information leaks. It's not like ones and zeroes are delivered through open doors.. It will work against Big Bad Wolves, especially if your house is made of bricks.

No, but people can walk by your desk and see what you're working on. Or look in the conference room and see what's on the whiteboard.

Not doing that would be Security Malpractice.

Re: Insider trade on Splunk acquisition?

#324

Post by mhink »

owenmarshall wrote: post #307
0cf8612b2e1e wrote: post #291

Earlier quoted context omitted.

That still seems like a pretty good deal. You missed out on capturing the entire upside, but lost no real money. Loss aversion and all that, but it feels like a reasonable strategy where you still come out ahead in the worst case. In the typical case, you can continue to collect those pennies.

> In the typical case, you can continue to collect those pennies. Top notch comment, considering options trading is often described as "picking up pennies in front of a steamroller." > Loss aversion and all that, but it feels like a reasonable strategy where you still come out ahead in the worst case You don't come out ahead in the worst case – the option you wrote can settle deep ITM and you are compelled to sell a…

Suppose I buy 100 shares of $ABC for $10 (total cost for me is $1000) and then sell a call option for $1 with a strike price of (say) $50. The absolute worst case scenario is that the value of my *shares* goes to $0, in which case I've lost $999.

On the other hand, if the price shoots up to, say, $85, I'm still obligated to sell them at $50. Since I bought them at $10, I've still made $4001 profit, but I'm still dissatisfied because I would have made $7500 if I hadn't sold the call option.

What you're describing is what happens if I don't already own those shares and the price skyrockets. If the counterparty exercises their $50 option when the current price is $85, then yes, I'm obligated to buy the shares at market price and sell for a total loss of ($STRIKE_PRICE * 100) - $5000 - 1.

Re: Insider trade on Splunk acquisition?

#325

Post by vGPU »

vGPU wrote: post #313
mrb wrote: post #275

Earlier quoted context omitted.

Important note: he didn't buy 550k options, he bought 26k, for a total profit of $475k. The tweet is incorrect. See https://news.ycombinator.com/item?id=37602079

No. He bought 260 options, which translate into the right, but not the obligation to purchase 26k shares at a certain price. 260 options is WSB lotto territory. At $4 each, that’s a thousand dollar bet. We’re not exactly talking big money here.

In fact, I was right. It was a WSB lotto trade. Guy is just a regular WSB trader who has made multiple trades on this ticker in the past.

Re: Insider trade on Splunk acquisition?

#326

Post by mrb »

vGPU wrote: post #313
mrb wrote: post #275

Earlier quoted context omitted.

Important note: he didn't buy 550k options, he bought 26k, for a total profit of $475k. The tweet is incorrect. See https://news.ycombinator.com/item?id=37602079

No. He bought 260 options, which translate into the right, but not the obligation to purchase 26k shares at a certain price. 260 options is WSB lotto territory. At $4 each, that’s a thousand dollar bet. We’re not exactly talking big money here.

I know it's 260 options, but I wrote "26k" as it's the right to buy 26k shares (1 option for 100 shares), for consistency with the parents who wrote 550k, meaning 5500 options to buy 550k shares.

Re: Insider trade on Splunk acquisition?

#327

Post by n2d4 »

sakex wrote: post #198

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?

I'm not a lawyer, and I'm sure there's one that would make the argument that it is. But generally, hedge funds do very similar things to predict mergers: https://www.bloomberg.com/news/articles/2019-07-02/hedge-fun...

Re: Insider trade on Splunk acquisition?

#328

Post by vGPU »

shortrounddev2 wrote: post #278
thisisit wrote: post #225

Earlier quoted context omitted.

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.

What's unethical about it

The fact that you're not one of our esteemed congressmen.

Re: Insider trade on Splunk acquisition?

#329

Post by vGPU »

mrb wrote: post #326
vGPU wrote: post #313

Earlier quoted context omitted.

No. He bought 260 options, which translate into the right, but not the obligation to purchase 26k shares at a certain price. 260 options is WSB lotto territory. At $4 each, that’s a thousand dollar bet. We’re not exactly talking big money here.

I know it's 260 options, but I wrote "26k" as it's the right to buy 26k shares (1 option for 100 shares), for consistency with the parents who wrote 550k, meaning 5500 options to buy 550k shares.

Correcting an error with an error, even for the sake of consistency, just perpetuates confusion. The average person probably doesn't even know what an option is, and your post could be read in multiple ways. He bought 26k options? 26k shares? $26k of either?

Re: Insider trade on Splunk acquisition?

#330

Post by [deleted] »

mhink wrote: post #324
owenmarshall wrote: post #307

Earlier quoted context omitted.

> In the typical case, you can continue to collect those pennies. Top notch comment, considering options trading is often described as "picking up pennies in front of a steamroller." > Loss aversion and all that, but it feels like a reasonable strategy where you still come out ahead in the worst case You don't come out ahead in the worst case – the option you wrote can settle deep ITM and you are compelled to sell a…

Suppose I buy 100 shares of $ABC for $10 (total cost for me is $1000) and then sell a call option for $1 with a strike price of (say) $50. The absolute worst case scenario is that the value of my * shares* goes to $0, in which case I've lost $999. On the other hand, if the price shoots up to, say, $85, I'm still obligated to sell them at $50. Since I bought them at $10, I've still made $4001 profit, but I'm still dis…

[deleted]
Post reply on HN