Is there any risk of insider trading or unusual option activity surrounding the announcement?

Insider‑trading risk:

The simultaneous resignation of both the CEO and CFO is material, non‑public information that could have been known to insiders before the public filing. Because the departures are abrupt and affect the company’s leadership at the top‑level, the probability of insider‑trading activity is higher than in a routine press release. Regulators typically scrutinize any trades by officers, directors, large shareholders, or employees in the days surrounding such a filing. If you monitor the “Rule 10b‑5” and “Rule 144” reporting windows, you’ll see heightened surveillance on any trades by those parties in the 3‑day “black‑out” period before the announcement and the 2‑day “cool‑off” after it.

Unusual option activity:

Management‑change announcements—especially resignations of the CEO and CFO—frequently trigger a spike in options volume, most commonly in out‑of‑the‑money puts as traders hedge against a potential downside. In the 30‑minute window before the release, you may already see elevated implied‑volatility (IV) skews and larger-than‑average put‑to‑call ratios. Data‑providers (e.g., TradeAlert, FlowAlgo) often flag a “unusual options” signal when the total options‑trade count exceeds the 30‑day average by 2–3×, and the premium on puts rises sharply. If such a signal appears, it suggests market participants are positioning for a move, which can amplify price swings once the news hits.

Trading implications:

- Short‑term: Expect a pre‑market dip and a widening of the bid‑ask spread as the market digests the leadership vacuum. Consider buying protective puts or tightening stop‑losses if you hold PETS long.

- Medium‑term: Watch the post‑announcement earnings call and any guidance updates; the true impact on fundamentals (cash‑flow, growth outlook) will determine whether the price stabilises or continues lower.

- Actionable: Keep an eye on SEC Form 4 filings for any insider trades in the next 48 hours, and monitor real‑time options‑flow screens for a surge in out‑of‑the‑money put volume. A confirmed spike in unusual option activity combined with insider‑trade filings would reinforce the risk of information leakage and justify a more defensive positioning (e.g., short‑term puts or a reduced exposure to PETS).