Trading of options to buy shares of HCA Inc. surged during the two weeks before a $33 billion buyout of the nation’s largest hospital company was announced Monday, according to data compiled by Bloomberg.
On July 7 and July 14, 10.3 million HCA call options traded, nine times the daily average volume, according to Bloomberg. The trades occurred before any news reports surfaced of the buyout offer.
“This doesn’t quite smell right,” said Jon Najarian, founder of InsideOptions.com, a website that sells data on unusual trading. Najarian estimates that whoever purchased call options July 14 may have made as much as tenfold and “several million dollars.”
Call options are contracts to buy a specified number of shares at a set price within a certain time period. The number of HCA call options changing hands jumped eightfold July 14, 10 days before the $51-a-share buyout deal was announced for Nashville, Tenn.-based HCA.
The New York Post said Wednesday the Securities and Exchange Commission is scrutinizing the HCA trading, without citing a source. SEC spokesman John Heine declined to comment on whether the SEC was looking into possible HCA insider trading.
