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Huge options buy before Dick's halt nets windfall

A huge purchase of Dick's Sporting Goods options took place on Wednesday just before a trading halt amid reports that the company would go private. The options netted the buyer nearly $450,000 on a $50,000 investment when the price skyrocketed after the halt, according to data from optionMONSTER.

Hundreds of January 2015 53-strike calls were bought at 12:07:59 p.m. EST, right as the first Reuters headline that Dick's was exploring going private surfaced.


A trading halt on the NASDAQ followed at 12:08:13 p.m. ET. The calls, which were priced $.25 before the halt, vaulted over $2 after.

Since the options were for 100 shares, a $.25 contract amounted to $25. Therefore, whoever made the fortuitous buy of more than 2,000 calls at roughly $50,000 raked in nearly $450,000.

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The action came in waves at nearly two times full session volume just before the trading halt, said optionMONSTER co-founder Jon Najarian.

"The calls were accumulated in what my brother, Pete, and I refer to as a sweep, which means these were purchased in the same second on every exchange that had an offer at $.25," Najarian said.

The U.S. Securities and Exchange Commission and Chicago Board Options Exchange declined to comment on the activity. Dick's and Reuters did not immediately respond to CNBC's request to comment on the buy.

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