Agfa Gevaert CompuGroupAgfa-Gevaert is a multinational company in Belgium. It’s mainly active in imaging technology for hospitals (wiki). After the market close, Bloomberg brought the news the CompuServe Group is preparing a take-over bid.

Mergers and acquisitions are business as usual. With option positions, some traders lose and others win. While take-over bids are often accompanied with a smell of inside trading, it’s hard to come up with evidence.

But the closer you get to the mediterranean sea, the stronger the rumors.

Insider trading in Belgium

I’ve never seen insider trading as obvious as in Agfa. The options trade on the Brussels option exchange. Agfa options are a quiet backwater. On average, just a few lots are trading every day. It’s not Anheuser-Busch Inbev. On Wednesday, a buyer appeared in the front month at-the-money call. Kept on buying for two days, the price level didn’t matter. Nothing else traded.

See the Bloomberg screenshot, and pay special attention to the implied volatility. The higher the volatility, the more expensive the option. It started on Wednesday the 26th. A buyer paying €0.20 for size. After two days the buyer eventually paid €0.45, with the stock trading around the same level. That’s an implied volatility of 126. That’s unusually high for a “normal” stock.

In total more than 1850 calls traded on the offer. In the screenshot, smaller trades are filtered out. This to give a better picture of how the prices developed.

Agfa calls

This kind of volume in a quiet stock, and at these pricey levels catch the eye. Some liquidity providers will be hurt. It’s beyond me who sold all those calls, with no hedge in sight. My bet is on SIG as the biggest victim.

People familiar with the matter

After market close on Thursday, the following news broke on Bloomberg. The sources are people familiar with the matter, who could not be named because the information is private. Definitely not as private information as it should have been.



Blue Horsehoe loves Agfa-Gevaert

Purchasing 1800 calls worth on average €0.33 is a total investment of €60.000. That’s too much for an incidental investor in Belgium. At least their luck is the ridiculous speculatietax is gone. It remains to be seen whether the inside trader in this case will be brought to justice. Should be a piece of cake, but solid evidence is always an issue. Especially in Belgium.

Dutch stock options are much more liquid – with more participants and bigger open interest. Inside trading on Euronext Amsterdam would be a lot harder to detect.


Though I did notice the extraordinary volume and prices in Agfa options, I’m not carrying any significant position in these options.

Second, the title of this post is a kind of clickbait. Liquidity providers and trading firms are as far from insider trading as possible. Market makers vote for Lance’s suggestion to Vincent Vega, when it comes to insider trading (“no trial, no jury..”).