Trader Turns $22,000 Into $10M In One Day: Insider Trading Or Genius In Cisco-Splunk Deal?

Cisco Systems Inc CSCO announced this morning that it will be acquiring Splunk Inc SPLK, a California software data company, for around $28 billion or $157 a share. Splunk’s stock traded over 20% higher on Thursday following the news of the acquisition.

One lucky trader bought $22,000 worth of out-of-the-money call options with a strike price of $127 on Splunk Wednesday that expire on Friday. At the time, the stock was trading around $120 a share. This means the trader was betting the stock would increase dramatically in a span of just a couple of days. 

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The call options were trading for just $.04 a piece on Wednesday. After Cisco announced the acquisition and Splunk shares shot higher, those contracts were worth more than $18.30. That makes the trader’s options worth more than $10 million, not bad on a $22,000 bet. 

Unusual Whales shared the trade on X.com, and the post has been viewed more than three million times.

Many users are speculating that there was something fishy going on, and that the trader had to have some sort of non-public material information on the acquisition.

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