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Jul 11 2011 / Stock - Clorox - Symbol CLX

Call Options Go Through The Roof


Does Someone Know Something We Should All Know?

Obviously something is going to happen with Clorox. The volume of calls has gone through the roof and the stock at one point was up 5.7%. I hate it when one of my stocks has something happening but the news is kept quiet. Only those who need to "know" seem to always be in the "know".

Well, I have enjoyed Clorox for a long time and if by chance it is going to get bought out, which is something I wrote about back in 2009 as Clorox while reasonably large, would be small "potatoes" for a company the size of Proctor and Gamble to pick up. Here's what I did "just in case" there is something happening.

Here is today's action in Clorox. At the time of writing this, 3:15 PM, everyone claims to know nothing about Clorox. Obviously this is not the case.

Clorox Stock - Jul 11 2011

There has never been fairness in stocks and probably never will. It's painfully obvious that something is going on with Clorox. If there is a takeover in the works, then perhaps the SEC will investigate who knew what and when. Personally I doubt the SEC can do anything. They are a body without teeth.

Here are July options that expire at week's end. The $70 and $72.50 are the big numbers. They expire on Friday so honestly, something is underway but only "some" people know about it.

Clorox Stock - July 2011 Options Chain

Here are August's options and these are the ones I decided to do.

Clorox Stock - August 2011 Options Chain

So what is a person to do in an event like this? I Bought 3 August $67.50 calls and I sold 3 August $67.50 puts and bought 4 August $62.50 puts just to hedge.

With volume this enormous, you just have to know that something is going to happen. I decided that I can afford a little excitement on a favorite stock, but only a little.




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