Traders got in on Office Depot early

Office Depot
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Shares of Staples and Office Depot were surging Thursday morning, after activist fund Starboard Value took a 6 percent stake in Staples and boosted its stake in Office Depot to 10 percent. But the stocks, and especially the options on Office Depot, moved a bit ahead of the news.

Read MoreStarboard wants Staples, Office Depot merger: Sources

Even as the broad market got hammered on Wednesday, Staples shares rose 2.4 percent, and Office Depot rallied 6 percent.

In the options market, the activity was even more pronounced. More than 60 times the average daily volume in Office Depot options traded, with the most popular contract being the January 8-strike call, according to options expert Mike Khouw.

In fact, 67,000 of the Office Depot January 8-calls traded on the day, which was enough to make them among Wednesday's most popular stock options contract. This happened even though they would expire as worthless if the stock didn't rally 23 percent from Wednesday's opening price. But with the stock opening Thursday at $7.44, it no longer seems so unlikely that the stock will rise to $8 by January.

Read MoreKnow your options: Buying a call

So why all the enthusiasm about Starboard's stakes? (Incidentally, the news was reported by The Wall Street Journal, before being confirmed in SEC filings.)

Well, investors have long been hoping for a deal between Staples and Office Depot. With the same activist investor heavily involved in both companies, such a deal could finally come to fruition.

When asked about the prospect of a deal between Staples and Office Depot, a representative for Staples responded: "We value shareholder input and dialogue and are focused on creating shareholder value over the long term. Our top priority remains transforming Staples by accelerating growth in our commercial businesses, investing in our online capabilities and changing the way we work."

A representative for Office Depot declined to comment.

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