Something funky happened in Unilever trading just before Kraft-Heinz announced it attempted a takeover

traders busy frantic questions

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On Friday, Kraft-Heinz confirmed that it had approached Unilever about a $143 billion merger in what would be one of the largest M&A deals ever.

This followed a Financial Times post breaking the news early on Friday that Unilever had been approached to create one of the world’s largest consumer goods companies. Unilever and Kraft, however, subsequently said the offer had been rejected.

Recent options trading in Unilever, however, has raised some eyebrows as a spike in upside bets started a few days before the deal was announced.

According to data collected by Bloomberg, 10,909 call options were traded on Wednesday, February 15, the most since 2011. Essentially, these are contracts that give an investor a right to buy Unilever stock specified price at a specified time. Call options are typically thought of as a bet the stock will go up, since a trader profits if the stock goes above the option price.

Essentially, these are contracts that give an investor a right to buy Unilever stock at a specified price at a specified time. Call options are typically thought of as a bet the stock will go up, since a trader profits if the stock goes above the option price.

According to the Bloomberg data, this was the highest number of bullish bets on Unilever’s stock since 2011. Additionally, put options — basically, the opposite bet on the stock falling — only traded 232 times on Wednesday.

On Wednesday, most of the calls bought were for $40 and $45 strike prices with the expiration date of March 17. According to the company’s Kraft’s offer was for $50 a share for Unilever, so the bets are already profitable as Unilever shares are up 10% near $47 on Friday.

The pattern wasn’t confined to Wednesday either, 5,186 call options traded on Thursday, February 16 in the US versus just 31 put options.

Unilever closed at $42.57 a share on Thursday.

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