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Nokia Corporation Message Board

  • calbucks09 calbucks09 Oct 7, 2013 8:05 PM Flag

    NOK april $5 calls today were 2nd highest traded option

    noteworthy action today:

    over 40,000 of the April $5's traded against open interest of 54,000 at that strike.

    overall over 110,000 options traded today in Nokia, with 4:1 calls to puts.

    that does the trade in the april 5's mean? one can only speculate, but my guess is that its someone doing some risk arbitrage (betting that the deal gets done). and not a short term bet on the share price.

    reasoning: the deep in the money calls have very little time premium relative to out of the money calls... these are more appealing if one wants a levered long position, but isn't sure when it will pay off.

    fwiw, this is actually what I'm doing as well with options to double the size of my long without losing a ton on time decay and volatility premium.

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