Shares of Anaplan Inc (NYSE: PLAN) Monday spiked close to 28% after private equity investment firm Thoma Bravo announced it had signed a deal to acquire the business planning software company. The announcement also triggered a big move in Coupa Software Inc (NASDAQ: COUP).
On CNBC's "Options Action," Mike Khouw of Optimize Advisors said that traders would want to “buy near-dated calls and sell out-of-the-money long-dated calls” because the stock will cease to exist after the acquisition.
Related Link: All The Stocks That Moved From CNBC's 'Fast Money: Halftime Report' Monday
That’s exactly the move traders made for Coupa Software’s stock options on Monday, which were trading more than 2.5 times their average daily volumes, he added.
A buyer bought 1,000 of the April 115 calls for an average price of $2.30 per contract, and then sold 1,000 of the January 2023 calls at an average price of $4.40 Khouw mentioned. The trader “may be making a similar bet to what we saw on Anaplan,” he said.
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