Was There Something Afoot In The Berkshire, Lubrizol Deal? (BRK-A, LZ)

Yesterday Berkshire Hathaway BRK announced it would be buying Lubrizol LZ for $135 per share in cash, which was a 28% premium to Friday's closing price.

That's all well and dandy, but if you take a look at Lubrizol's options last week, you will notice something very strange.

There was a spike up in the call options on March 9, with 3,182 call options trading, versus the average of 434 advancers. This is 7.3 times higher than what it normally is. The most active call option was the April 2011 $110 calls, with an implied volatility of 29.3% This is about the premium that Warren Buffett and Berkshire Hathaway paid for Lubrizol, so clearly there something going on here, and someone caught wind of the deal.

Maybe it's the conspiracy theorist in me, but looking at those options, someone had to have known something before the deal was announced. This has happened before, and will happen again, as big money gets the knowledge before it's released, but with Buffett as part of the deal, there will be added scrutiny.

Wall Street wonders why the retail investor doesn't trust them. Here's your proof guys.