Media Moves

Options to buy Dow Jones stock surged on Monday

May 1, 2007

Posted by Chris Roush

Options to buy stock in the parent company of The Wall Street Journal, Barron’s and Marketwatch surged on Monday, Bloomberg News is reporting, the day before it was disclosed that News Corp. had made an unsolicited offer to acquire Dow Jones. The increase indicates that some investors knew about the offer before it became public knowledge.

Bloomberg NewsJeff Kearns of Bloomberg wrote, “The number of call-option contracts traded in New York-based Dow Jones jumped 14-fold to 4,335 from the average daily volume of 309 over the previous 20 trading sessions, according to Bloomberg data.

“‘Somebody knew this deal was coming,’ said Jon Najarian, co-founder of optionmonster.com, a Chicago-based provider of financial data on unusual trading activity. ‘I don’t think there’s any such thing as coincidences on Wall Street.’

“The U.S. Securities and Exchange Commission monitors well- timed options bets. In March, regulators froze more than $5.3 million in profits from suspected insider trading of TXU Corp. stock options that were bought days before a $45 billion takeover of the company.

“News Corp. spokesman Andrew Butcher and Dow Jones spokeswoman Linda Dunbar didn’t immediately return calls for comment. SEC spokesman John Nester declined to comment.”

Read more here.

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