UST Inc. (NYSE: UST) shares are up nearly 23% today on reports that Altria Group (NYSE: MO) is interested in the tobacco company. Yesterday, shares spiked mid-day after a flurry of short-term call option activity ignited takeover rumors. Nearly 12,000 call options were purchased at the October $60 strike by mid-day at around $1.10 per contract, which means someone made a short-term $1.3 million bet. These options are now trading $6.93 per contact, which means that yesterday's speculations are now much richer!

Trader(s) who purchased the $1.3 million stake by mid-day yesterday - before any news at all hit the market - now have options worth some $8.3 million! Not a bad return on investment for a substantial one-day bet on no new news. Now many investors are wondering, rightfully so, who made these trades and if they were on the level. After all, it's not every day that someone can make an off-the-wall bet on out-of-the-money options in the near-term and make a 600% return on investment in a day!

Unfortunately, these types of events are not so uncommon in the stock market...

Related Companies
Star Scientific Inc. (STSI)
Reynolds American, Inc. (RAI)
Alria Group Inc. (MO)
British American Tobacco (BTI)
Philip Morris International Inc. (PM)