On August 1, 2005 there was 63-year old Croatian lady named Anticevic who took $130,000 and made $2 million literally overnight by purchasing $45 and $50 call options on Reebok. The next day Adidas bought Reebok and the stock jumped 30%. The SEC investigated and unraveled a fascinating tale of insider trading that spread from Croatia to a relative in a brokerage house in New York.

I was sitting at my desk when someone said look at Dow Jones & Co. (NYSE: DJ). Murdoch's News Corp. (NYSE: NWS) just made a bid. A couple of keystrokes later I saw the stock was up about 50%. I then heard the comment everyone always makes... "I should have bought that one yesterday." Thanks, but a little too late.

But then I looked a little further and it seems like someone has.

A look at the open interest indicates that there are 4,518 contacts open on the September DJ 45 calls (DJII) and 3,464 options traded yesterday. In fact, I am showing there was no volume on that option strike since February 1, and then yesterday there was suddenly 3,464 contracts traded and today the stock is up 50%. Interesting.

Those 3,464 contracts were traded at 35 cents or less. Each option contract represents an interest in 100 shares of stock. So if they were bought, that is a $121,240 bet the stock was going to go up. The stock is trading in the area of $55 so that means those 45 calls are worth over $10 each. I don't know about you, but $0.35 to $10 literally overnight looks like a nice return to me. Too good to be true. That $121,240 investment is now worth $3.4 million. If that 3,200% rate of return isn't good enough, check out the 5,000% on the June 40 calls. There were 641 contracts of June 40 calls (DJFH) bought at 0.30 for $19,230 yesterday which turned into $961,500 overnight.

While I do not have the resources of the SEC and those traders are innocent until proven guilty -- and they could have been just plain "lucky" -- this sure looks like insider trading. There just might be another cleaning lady overseas somewhere who has a healthy brokerage account.

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You To Dump A Stock.

Disclosure note: Mr. Kersten owns and or controls a diversified portfolios of long and short positions that may include holdings in companies he writes about.