This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Bulls Tune Into Sirius XM

Stocks in this article: SIRI

By David Russell of OptionMonster

NEW YORK -- Liberty Media (LMCA) might not want to buy Sirius XM (SIRI), but investors want to own the satellite-radio stock.

OptionMonster's tracking systems detected the purchase of more than 145,000 SIRI January 4 calls on Friday, most of them priced for 17 cents to 26 cents. The volume was more than double the strike's previous open interest of 68,360 contracts, indicating that new positions were initiated.

These calls lock in the price where investors can buy SIRI stock, letting them cheaply leverage a move higher. The contracts can also generate significant leverage, but they will expire worthless if shares remain below $4 through early next year.

Sirius shares rose 2.08% to $3.44 on Friday after Liberty Media Chairman John Malone abandoned a takeover attempt. The move will let Sirius resume a buyback program in a stock that's near the low end of its recent trading range following a steady slide since October.

Later in the session, traders sold about 35,000 January 3 puts in SIRI for 22 cents to 24 cents, reflecting the belief that downside is limited. As long as the stock stays above $3, they'll keep that premium as profit.

Sirius was the fourth-busiest name in the option market on Friday, trailing only heavyweights Apple, Facebook, and Bank of America. Aggregate option volume in the stock was 23 times greater than average, with calls accounting for more than 80% of the total.

Russell has no positions in SIRI.

 

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters