Upside option positions in Staples soared in the last few minutes of today’s session on news reports that the office-supply company is advanced buyout talks.
On June 22, Investitute’s market scanners identified the purchase of 4,300 July $9.50 calls for $0.15 and $0.20 with shares at $9.28. These were new positions, as there was no open interest in the strike before the activity appeared.
These calls shot up to $1.20 just before today’s closing bell, representing a profit of more than 500 percent. The stock rose less than 6.7 percent since those contracts were bought, illustrating the type of leverage that can be achieved with options.
SPLS jumped 8.41 percent to $9.93 today. Shares surged just before the closing bell after the Wall Street Journal reported that private-equity firm Sycamore Partners was near an agreement to purchase the company for more than $6.5 billion, more more than $10 per share.
It was the second time in the last week that Staples has yielded a winning option trade on those negotiations.