Outside the small world of voice-recognition software, Belgium's
Lernout & Hauspie
pumped $45 million in the firm and it had hammered out licensing pacts with
, among others.
While selling the calls would normally be seen as a more bearish move, in this case if Lehman's client is holding a large chunk of Lernout's underlying shares it bought in December, the 65 strike price is a reasonable exit point. "This has been a kick-ass company," one trader said. In addition to cashing in the gains on the underlying shares, the client gets to take in premium of 4 1/8 ($412.50) per contract. Only five other March 65 call contracts existed before today's trading.
In other options activity today:
continued to get some good feelings from the market carrying over from its after-the-close earnings announcement last night. Cisco's shares were up 1 1/4 to 64 5/16 near midday, carrying volume in its February 65 calls to more than 3,100. The price of the options was up 1/4 ($25) to 1 3/4 ($175.00) today.
Also holding on to positive sentiment from yesterday was
, which saw a pickup in its out-of-the-money February 60 calls. The big REITs shares were off 1/16 to 52 13/16 this morning.
Philadelphia Stock Exchange Oil Services Index
(OSX) was big among index options at midday. The OSX was up 4.33 to 101.81 this morning, leading speculators to buy the February 105 calls on the chance that the index will move further upward before the third Friday of the month. The contracts, which rose in price from 1 5/16 ($193.75) to 3 1/8 ($312.50), racked up volume of more than 1,200.