Here's two scenarios where this makes some sense.
a) Some entity (in the know) recently purchased 2.4 million shares at say an average price of $5. They sell the covered calls for $0.32. If SD is above $5 by September 20, they realize $5.32 per share for a profit of $768,000 or roughly 6% on their $12 million short term investment.
b) Some entity (in the know) believes that the market makers will drag SD down by September 20, and they will buy back the calls for considerably less than $0.32 per.
If they are in fact "in the know", they will likely know if an offer for SD is in the works and when. Being in the know and playing this game may be illegal, but it does not stop people from doing so.
I'm not "in the know". I am very deeply into SD at break even at this current price, and will hold till an offer is made, or the stock appreciates on it's own.
Good luck to all longs!
OI now ~52K, looks like was new position. Interesting. Could be Syria play, but 14 days seems short for that angle esp if equities in general trade off. ~$1 million in capital to put that trade on yest....
Any options experts out there willing to interpret what this super high $5 CALL options actually means? I typically only see such a huge increase in CALL activity right before a buyout (e.g. NOK on Friday) or some type of big news event that previously leaked to the few. Very strange otherwise.
Any reason why it couldnt be a short position hedging against a potential move higher due to any number of non-fundamental issues? Was the trade done as a spread (sold higher strike), capping the upside at a certain strike but also decreasing the intial cost to do the trade?
Sentiment: Strong Buy
Usually it's a play on earnings,but in this case earnings are not until Oct. so it's either buyout,some good news going to happen,or someone playing the attack on Syria driving oil prices.If the Syria play there would be other oil co. getting play.