The heavy trading of UUNet options started two days before the company was acquired by MFS for $2 billion. "All of the sudden everyone wanted these options," said Mike Frazin, a market maker at the Chicago board. "The volume exploded in these options on Friday's close and Monday's close."
Pre-merger buyers were well rewarded, as UUNet stock rallied on the Nasdaq market Tuesday to close at 58-3/4, up from 48-1/4 on Monday. UUNet closed today at 63.
The CBOE did not indicate how long the investigation would last.