I own shares long. I was looking at call options this AM (made some money in the last week and am greedy I guess). I noticed small open interest in the next few months. But then a big block (20+K) of both puts and calls at 10 in August. Any option tea readers out there that can see any significance to that ?
20,000 contracts. two million shares. Probably a fund manager. bullish play. He's probably already up two million bucks on the deal if The entity that bought the August calls sold the puts. By August he probably figures two dividends will have been declared and the market will have a general valuation on the two companies.
I went for the Jan2014 10calls when nct dipped to 10.40 last week. 55 contracts. Up 35% since then, Might even hold until December. Lots can happen until then, including collapse. Most likely sell half when they hit a triple post split. I think even at 1.55 they are a buy, but I am fully allocated now.
To me it looks like a derivative play to acquire stock. At the time it was executed in January it appeared to be a double leg trade. Either way not my money on that one. And I wish the trader good luck as to all.
I was also interest in making some money by selling some covered calls. Looked at Jan14 $12.50 @ .50 and decided it wasn't worth it. NCT could appreciate above $13.00 resulting in an opportunity loss. I am surprised covered calls aren't getting more. I probably should have been buying calls instead of shares, would have made more.
I bought $50 jan14 VZ calls on 2/7/13 for $0.5175 each...they are now at $1.02 !!! I love it! It's too steep at $46 a share for me to get in, but I knew the stock was going to push $50 by the end of the year and wanted to make some money on it...
Thanks for the reply. It was the large amount, and that puts and calls at that price had almost equal volume that caught my attention. I guess there are so many variations on options strategies it could be a lot of things.