With expectations that the world's biggest miner BHP Billiton will have to sweeten its bid for Rio Tinto, it's clear that Rio shareholders are in a very strong position. But the question is whether some have already done even better because they had advance warning, some inside knowledge, that a deal was in the offing.

Jon Najarian of OptionMonster.com says that certainly seems to be the case.

As reported by the New York Times' DealBook, Najarian found that holders of four types of Rio Tinto call options - which let the holder buy shares at a fixed price - realized paper profits of more than $7 million. There was unusually heavy trading in those options and some massive increases in prices, some by as much as 4100 per cent. Good signs that somebody knew something was going down.

On the other side of the world in Australia, Rio Tinto shares started rising in the last half hour of trade, well before BHP Billiton confirmed it had sent a love letter to the Rio board. That sudden heavy trade in Rio shares was happening on a day when the market was down considerably. I expose the unusual trading activity here.

Will the regulators do anything about it? I doubt it. The chances of anything happening are remote as there had been months of speculation that BHP Billiton was about to have a tilt. But the trading patterns in call options and shares suggest that some might have had the inside running.