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Insight: When options trading ahead of deals raises eyebrows

Within 36 hours of Warren Buffett's announcement of a deal to buy H.J. Heinz, U.S. authorities froze an account linked to possible insider trading.The speed of the crackdown on a lucrative options bet, combined with successful prosecutions of insider trading rings, suggested that regulators were quickly jumping on any suspicious activity.Yet some veterans of the options business are unconvinced. They worry that very profitable options trading ahead of big corporate news is undermining investor confidence in the fairness of markets.A study for Reuters by options research firm Schaeffer's Investment Research of 181 such announcements in the 14 months to the end of February shows that such activity prior to news of takeovers, big stock repurchases or a major investment occurs on a regular basis.There were 41 examples of companies, or 23 percent of the sample, where the volume of new call options positions - effectively bets that the underlying stock would rise - had risen by at least 50 p...

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  1. Humana, The Shaw Group Among Stocks Down on High Volume Tuesday

    There are a few stocks down on high volume today:Today, Humana (NYSE:HUM) is down on high volume, trading at a volume of 6.2 million, or 3.1 times its average daily ...

  2. Monday Blues Persists: Stocks Inch Lower

    FOX Business: The Power to ProsperU.S. stocks retreated fractionally on Monday, erasing just a slice of last week's ECB-fueled surge and giving the Dow its longest M...

  3. Stocks Favor Red as Dow's Monday Slump Continues

    FOX Business: The Power to ProsperWall Street dipped slightly lower Monday afternoon as the bulls take their feet off the gas pedal after the blue chips soared more ...

  4. CB&I to Buy Shaw for $3B

    The Shaw Group (NYSE:SHAW) has agreed to be bought by CB&I (NYSE:CBI) in a cash and stock transaction valued at $3 billion, creating one of the world's largest engin...

  5. Shaw Group Cut To Underperform At Macquarie

    Analysts at Macquarie (USA) Equities Research on Wednesday cut their rating on Shaw Group Inc. to underperform from neutral a day after the power plant construction ...

  6. Capital Goods Sector Wrap

    The S&P 500 lost 0.9% while the Capital Goods sector (XLI) showed little movement during trading today.EDAC Technologies Corporation (NASDAQ:EDAC) was a major gainer...

  7. Advanced Micro, ARMOUR Residential REIT Among Stocks Down on Above-average Volume Tuesday

    Here are stocks that are down on high volume today:Advanced Micro (NYSE:AMD) is trading down on above-average volume today, seeing a price drop on a volume of 62.8 m...

  8. Shaw Group Narrows Loss, Sets $500 Mln Buyback

    Shaw Group Inc. said Tuesday its third-quarter loss narrowed to $16 million, or 24 cents a share, from a loss of $70 million, or 89 cents a share, in the year-ago pe...

  9. Capital Goods Sector Wrap

    While the S&P 500 grew 0.1%, the Capital Goods sector (XLI) showed little movement during trading today.The ETF, as a proxy for the sector, tracked closer to the ove...

  10. BlackRock, HollyFrontier Among Stocks Down on High Volume Tuesday

    A few stocks are down on high volume today:BlackRock (NYSE:BLK) is trading down on a volume of 1.4 million, or two times its normal daily volume. Trading at $166, th...

  11. Shaw Group Profit Climbs Sharply, Revenue Edges Up

    Shaw Group Inc. said Thursday its second-quarter profit for the three months ended Feb. 29 increased sharply to $52.5 million, or 78 cents a share, from $1.2 million...

  12. Expected Price Gains in Uranium Mining and Nuclear Energy (CCJ, DNN, URRE, URZ, UEC, URG, USU, GE, SHAW, ARVCF, TOSBF)

    The outlook for uranium miners and nuclear power plant builders has dimmed considerably following the disaster at Japan’s Fukushima Daiichi power plant last spring. ...

  1. As Tax Hikes Loomed, Some CEOs Sold Stock

    As Congress mulled higher tax rates last month, dozens of corporate executives sold big chunks of stock, saving themselves millions of dollars in taxes.A Wall Street...

  2. Shaw CEO sells most of stake after shareholders ok CB&I deal

    James Bernhard, chief executive of engineering company Shaw Group Inc , has sold off most of his stake in the company he founded after shareholders approved a sale t...

  3. CVS Allowed to Keep Kodak Kiosks in its Stores

    A bankruptcy judge signed off on a deal that will keep more than 15,000 of Eastman Kodak Co.'s (EKDKQ) photograph-printing kiosks in CVS Caremark Corp.'s (CVS) retai...

  4. BANKRUPTCY WEEK AHEAD: A123 to Seek Sale Approval

    A123 Systems Inc. plans to seek bankruptcy-court approval Tuesday to sell itself to the winning bidder of an auction that began Thursday.The government-backed maker ...

  5. Firm dollar, weak Europe crimp U.S. industrials' sales

    Four top U.S. manufacturers, including General Electric Co and Honeywell International Corp , reported weaker-than-expected sales on Friday, in a fresh warning to in...

  6. Firm dollar, weaker Europe crimp industrials' sales

    A common theme emerged Friday as U.S. multinational manufacturers delivered a mixed bag of earnings results: Sales were stung by a robust U.S. dollar, and weaker gro...

  7. Toshiba to Buy Shaw's Westinghouse Stake for $1.6 Billion

    Toshiba Corp. (6502.TO) said Wednesday it will buy out Shaw Group Inc.'s (SHAW) 20% stake in nuclear power-plant company Westinghouse Electric Co. for about Y125 bil...

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