DEALTALK-3Com trades a red flag in sensitive environment

*Line between speculation and insider trading is blurry

*3Com option trades suggest Hewlett offer was leaked

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By Doris Frankel

CHICAGO, Nov 12 (Reuters) - Will they ever learn?

One might think that pictures of hedge fund managers and executives in handcuffs from the Galleon and other recent insider trading cases would act as a deterrent to using material insider information to trade.

Yet someone piled into 3Com Corp's (COMS.O) bullish options only hours before Hewlett-Packard Co (HPQ.N) announced late on Wednesday it was buying the network equipment company at a big premium, raising suspicion that the news was leaked.

During Wednesday's trading session, 8,085 3Com call options, which can be used as a bet that a stock will rise to a certain price by a certain date, traded against only six put options, which are often used as bearish bets on a stock. The stock gained more than 5 percent to $5.69 on that day.

That's a ratio of 1,348 to one, an almost unfathomable ratio in terms of bullishness. The 8,000-plus call options amounted to 17 times the recent average daily call volume, according to option analytics firm Trade Alert, and the buyer stands to profit handsomely if the deal is consummated.