They bought $127 call options (the right to buy Splunk at $127) while Splunk was valued at $119 and the options were due to expire in one day. That's a cheap option to buy, given the improbability of a sudden jump like that.
The only way the buyer could make a profit would be for Splunk to go higher than $127 and if it went significantly higher, they'd stand to make an eye-watering return-on-investment multiple in one day. Which is what happens.
It would be suspicious if this turns out to be a speculative trader making a one-off transaction.
The only way the buyer could make a profit would be for Splunk to go higher than $127 and if it went significantly higher, they'd stand to make an eye-watering return-on-investment multiple in one day. Which is what happens.
It would be suspicious if this turns out to be a speculative trader making a one-off transaction.