I know a few others here noticed this, but here's a quick look at Thursday's volume in the May calls. Someone really likes that May 11 strike!
$11 strike - 29K ($2,729,008)
$15 strike - 12.6K ($302,256)
$17.50 strike - 15K ($120,808)
Strike Symbol Last Chg Bid Ask Vol Open Int
11.00 TIVO 0.86 0.11 0.90 0.98 29,032 40,021
15.00 TIVO 0.20 0.09 0.21 0.26 12,594 33,583
17.50 TIVO 0.09 0.02 0.07 0.10 15,101 57,978
Given that TIVO has maybe 50% downside and 100% upside, I have to believe that is not protection for someone shorting the stock. 10% of the share price (94 cents) would be a lot to pay for protection and move the level of profit for that short position to below the $7.90 level.
Next, look at the August $8 strike puts. The purchaser laid out $1,470,658 on something that will only be profitable for the buyer if TIVO goes below $6.50 per share. Maybe someone is playing both sides...who knows. Call me crazy, but it would seem ludicrous to put $1.5 million at risk in order to make $3.0 million if TIVO drops to $3.50 per share by August.
8.00 TIVO 1.40 0.02 1.41 1.53 10,073 1,410
Does anyone have a strategy or take on this besides inside information?
it is a hedge most likely against a call position
they are figuring the stock will either go up significantly or down significantly...they figure either the stock moves above $13+ or it is at $5
they win so long as the stock goes to $13 or higher or $5
that is what I think that action is
I was watching the options all day and the 11's and the 15's were hitting simultaniously. That speaks bullish spread to me. There was similar activity in the 17's also. The open interest increased as follows.
May 10's 3048 with 3864 volume
May 11's about 13K with 30K trading
May 15's about 6k with 12.5K trading
May 17.5's about 5k with 16.5k trading.
Overall there was a net increase in open interest and the trades were mostly at the ask when they really started hitting. Even when the stock price was going down the option prices were going up. Unusual.
I also saw several trades above the ask, which to me seems like the buyer was very aggressive.
I dabble in options and I'm no expert by any means. I'm also very long TIVO and have been for a very long time. If someone who has more experience and less bias wants to share their wisdom, I'm happy to listen.
there was an increase in may 11s however there was a decrease in the May 15s and May 17.50s
it could be that the trader is still very bullish on Tivo however is reducing the risk in case the ruling only sends Tivo to $13+ in the event that only disablement is affirmed
just my opinion as far as the theory why but definately the open interest in the 15s and 17.50s for May went down when the May 11s went up
either way the fact that the interest is May 11s went up is bullish and also the fact that they increased the interest in the Mays versus going out to August makes me think smart money believes a ruling is coming very in less than a month and that Tivo will be at least over $13
Not a ton of them but I figured, what the heck, they are super cheap (IMHO) and this decision is LONG overdue.
C'Mon judges, get off your lazy butts and make a ruling in the next 30 days. The American public wants this long, long 2+year drawn out decision settled by Summer!
I am bullish on TIVO as I expect the case will be ruled in their favor. This is just me "wanting" this to happen, not any info that leads me to this conclusion.
In the end, as I just posted what will drive the stock up or down is the:
1. Decision and $ judgments
2. The markets reaction to that
I am confident that in the end, the justice system will work out for Tivo and other small companies that the big guys can't infringe without severe penalties.
My take is that this goes to $6 or $16 give or take. Many are speculating so this will be a huge story when it breaks... Any day, any day
I bought Tivo and sold the April 9 calls. This morning, after listening to the en banc hearing, I will maintain my position, but will roll over the 9s to the May 6s. After hearing the 3 judge panel, I truly believe the contempt against dish will be dropped. I have a ton of nov 5 and jan 5 puts, but im thinking 5 is the level it will drop to on the announcement. Good luck