Bulls rake in cash on $AGN calls

News today that Allergan (AGN) would be taken over by (ABBV) is making headlines, and call buying just prior to today’s announcement is making some traders much, much richer.

Starting with shares under $117 on June 14, our algorithms picked up strong buying of November $125 calls. Then last week (June 19), more big buying hit at the August $135 call strike (see screenshot above).

With shares already trading $170, both calls are deep in the money. The November calls are intrinsically worth $45, the August calls worth $35, and as both traded over 5,000 contracts (every option represents 100 shares of AGN) that means a million share equivalent of buying at those much lower prices. In total about $40M on these trades alone and they were just the largest.