Did Unusual Options Activity Predict the Buyout Offer in Macy’s? (+1704%)

Did Unusual Options Activity Predict the Buyout Offer in Macy’s? (+1704%)

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Today, Macy’s shares surged to as high as $21.23 on news that it has been offered a $5.8 billion dollar buyout by Arkhouse Management and Brigade Capital Management. The offer — which works out to $21 per share — came after a slew of unusual options activity that Market Rebellion has been reporting all last month, raising the question, did somebody know something ahead of time? 

A Timeline of Unusual Options Activity One Month Before the Macy’s Buyout (January Call Options Skyrocket 1704%)

Beginning the day before Macy’s quarterly earnings report, with Macy’s shares trading at just $12.68, we alerted members to unusual options activity in $14 strike OTM weekly calls. That trade worked out, as Macy’s proceeded to rally into double-digit percentage gains on the day following their earnings. But these buyers weren’t anywhere close to done.

Just two days after the rally, with Macy’s trading at $14.18, we identified unusual options activity in the January expiring $17 strike calls, bought for just $0.24-$0.25 per contract. We identified this buying in the Market Outlook — Market Rebellion’s weekly newsletter. Here’s a screenshot from that publication:

Today, the January calls we alerted Market Rebels to in the Market Outlook (which were bought for $0.24-$0.25) became worth as much as $4.42 per contract — a gain of 1704%. The 10,000 options that this trader purchased were bought for a total value of $245,000 — and became worth over $4.4 million at one point today. 

Still, these buyers weren’t done. 

On November 27th, we identified another big unusual options activity trade in Macy’s. These were weekly expiring, far OTM $15.50 strike options bought for between $0.07 and $0.12 with Macy’s trading at $14.84. We gave this trade in the Rebel Roundup on November 27th around 3PM EST. By December 1st, these options were trading for over $1.50 per contract — a gain of 1478%.

Here’s a screenshot from the Rebel Roundup newsletter we sent out that day:

And this is just the tip of the iceberg – there were several other unusual options activity alerts we gave in Macy’s leading up to this big announcement. All of this raises the question:

It’s unapologetic, but to us, it doesn’t matter whether this was insider trading or not. What we care about is that we identified a series of trades for our members in real time which ultimately paid out in a big way. For more unusual options activity like this, consider trying one of our UOA services below.

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