Trader Scraps 3Com Options Trade (COMS)

An options trader with the foresight to buy 6,900 3Com (Nasdaq: COMS) 5 strike calls last week before Hewlett-Packard (NYSE: HPQ) announced it was buying 3Com will scrap the trade, erasing $1.2 million in profits.

Details are scant, but one can only surmise this trader is fearful of being investigated by regulators for trading ahead of the news. That would be the only plausible reason for breaking this trade.

Breaking trades is unusual to begin with, but this scenario is even more unusual since the trade was broken two days after the fact and options clear next-day.