The probe is being sprearheaded by the Chicago Board Options Exchange on behalf of the Options Regulatory Surveillance Authority, according to a report by USA Today. The CBOE will be looking into the purchase of a large number of calls on July 12, only hours before AT&T disclosed the $4 billion takeover after the market closed that day.
Leap had averaged barely 1,200 options per session at the time, but that day volume spiked to nearly six times that amount. OptionMonster's tracking systems detected heavy call buying in the July 9, Aug. 9, and Oct. 8 strikes. The activity stood out even more because more than 80 percent of the trades occurred in the final two hours of a Friday session in the summer, when option activity is typically at its slowest.