Traders remain infatuated with the prospect of satellite radio, and as the merger of Sirius (SIRI - commentary - Cramer's Take) with XM Satellite (XMSR - commentary - Cramer's Take) lumbers toward a conclusion, speculation in the names is heating back up.
Topping the most-active-option list is Sirius' $3 call, which has traded over 25,000 contract thus far. Then again, maybe it's not the business prospects, but the price tag of just 15 cents a contract that attracts these active traders.
Heavy option activity in Qualcomm (QCOM - commentary - Cramer's Take) -- whose shares are up some 20% to $54, with an intraday high of $63 -- following their earnings report, has volume about five times its daily average and over six calls trading for every put. While the most active strike is in the August 47.50 contract, which has traded 20,000 contracts, most of that is probably liquidation as prior open interest was 46,000 contracts.
More notable is that there has been active trading in the January 2009 series. One notable transaction was in the $45/$55 call spread, which was done 7,000 times. It appears this was someone rolling up their long $45 calls into the $55 strike for a net credit of $5.90 as a means of taking some money off the table, but maintaining upside exposure. There is also fresh buying in the $60 strike, which has traded over 14,000 contracts, which represents over 70% of the prior open interest.
Steven Smith Blog Good Trading Opportunities May Be Here 7/23/2008 4:19 PM EDT Sector rotation among the financials and energy should provide some openings for aggressive types.
Steven Smith Blog What to Do If You Missed the Snapback 7/23/2008 1:06 PM EDT Prices will revert to a trading range, so start thinking about some premium-selling strategies.
Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.To read more of Steve Smith's options ideas take a free trial to TheStreet.com Options Alerts.
RSS FEEDS
PODCASTS
