Pandora Options Active As Shares Extend Rally
by Option Review - January 18th, 2012 1:50 pm
Today’s tickers: P, NXPI & CQB
P - Pandora Media, Inc. – Shares in the Internet radio provider are on a tear this year, having rallied nearly 30.0% since the final trading session of 2011. The stock is up 8.1% at $13.06 today, although it’s worth noting the stock trades below its June IPO. Put activity on the music media company this morning suggests at least one strategist does not expect the music to stop in the near future. Investors exchanged more than 3,200 puts at the Feb. $10 strike against open interest 563 contracts, indicating the positions were opened. It looks like most of the put options were sold for an average premium of $0.25 each. Put sellers walk away with the full amount of premium at expiration next month as long as shares in Pandora Media, Inc. exceed $10.00. The strategy could saddle sellers of the options with shares of the underlying stock at February expiration in the event of a sharp pullback below the strike price. Premium received on the play provides limited protection against losses should shares tank, however, traders start to see losses on the downside should the stock drop 25.0% to trade below the effective breakeven price of $9.75 at expiration day. The put contracts expire ahead of the Company’s March 1 fourth-quarter earnings release.
NXPI - NXP Semiconductors NV – Call options on the semiconductor supplier are more active than usual this morning, with shares in the Eindhoven, The Netherlands-based Company soaring 14.7% to an intraday high of $19.72. Traders appear to be placing bullish bets on NXPI today, snapping up in- and out-of-the-money call options to position for shares to extend gains in the near term. Meanwhile, some call buyers that purchased calls ahead…
Bullish Player Picks Up Verizon Call Spread
by Option Review - April 27th, 2011 4:19 pm
Today’s tickers: VZ, ALR, SIMG & NXPI
VZ - Verizon Communications, Inc. – Activity in Verizon LEAPS suggests one strategist is positioning for shares in the communications company to trade at a substantially higher price by expiration in January 2013. Verizon’s shares are currently up 1.75% today to stand at $38.29 as of 12:15pm in New York. The stock is hovering just $0.66 below its 52-week high of $38.95 this afternoon, one day before Apple’s white iPhone 4 comes out. The phone will sell for a suggested retail price of $199 for the 16gb model at Verizon wireless stores in addition to AT&T stores and Apple’s online store. In VZ options, it looks like one bullish player purchased a call spread, picking up 4,000 deep in-the-money calls at the Jan. 2013 $35 strike at a premium of $4.86 each, and selling the same number of calls up at the Jan. 2013 $45 strike for a premium of $1.11 apiece. Net premium paid to initiate the spread amounts to $3.74 per contract, and positions the investor to make money above a breakeven share price of $38.74 through expiration in more than one year. Maximum potential profits of $6.26 per contract are available to the call-spreader should shares in VZ surge 17.5% over the next 20 months to exceed $45.00 at expiration. Verizon’s shares last traded above $45.00 back in December 2007.
ALR - Alere, Inc. – The Waltham, MA-based medical supplies company with a focus in women’s health popped up on our scanners today after one trader initiated a large-volume spread in the January 2012 contract. Alere’s shares are down 2.6% at $37.57 just before 12:45pm. The company posted first-quarter earnings of $0.61 a share, which met analyst expectations, ahead of the opening bell this morning. It appears the investor responsible for…