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This column was originally published on RealMoney on Sept. 22 at 1:28 p.m. EDT. It's being republished as a bonus for readers.

Eastman Kodak


has been in turnaround mode for several years now. While progress has come in fits and starts, the general trend is positive. At minimum, the company has slashed costs and shed underperforming units to sufficiently shore up its balance sheet. Bankruptcy, which was a distinct possibility just three years ago, is no longer part of the conversation concerning Kodak's future.

On Wednesday, it announced the shutdown of its synthetic chemicals operation, and it will take a $27 million charge in what might be one of the last moves of the restructuring plan originally laid out in January 2004. Now that it has cut costs and shed most of its film and chemical assets to focus on the digital business, which Kodak claims is its future, here comes the hard part.

It needs to increase revenue and earnings growth by gaining market share in a competitive area. It's playing catch-up to big players like


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, Fuji and Canon, which have well-established business customers.

Someone thinks the picture looks bleak and seems to be throwing in the towel, as more than 66,000 of the January $30 calls traded early this morning. The volume was done in two large 20,000- and 44,000-block trades this morning. Both trades took place at the bid price of 5 cents per contract, and prior open interest in the strike was 88,000 contracts, which would be sufficient to cover the trade. This appears to be someone liquidating a previous long holding.

It may seem questionable to sell out something for a nickel; after all, maybe Kodak's new lean structure makes it a takeover candidate. However, when you have 66,000 of these, those nickels add up to $330,000, which even at multimillion-dollar fund would not be confused with zero or cavalierly letting the options expire worthless. For all we know, the options might have been purchased many months ago as part of a more complicated position, such as shorting stock, and having served their purpose of providing upside protection, it makes sense to recoup as many nickels as possible.

Steven Smith writes regularly for 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;

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