A huge long-term trade is betting that Sirius XM Radio will its hold recent gains.
More than 55,000 SIRI options have traded this morning, about triple its daily average over the last month. Almost all of the volume is in the January 2015 2 puts.
An institutional trader sold 50,000 of those contracts in two blocks for the bid price of $0.15. This is a new position, as the volume was well above the strike's open interest of about 30,000.
The put selling is a bet that SIRI will stay above $2 over the long term. This has a relatively high probability of profit but is known as a " nickel strategy ," likened to picking up nickels in front of a steamroller. (See our Education section)
SIRI is up fractionally this morning at $3.23. The satellite-radio operator was at a high of $3.63 a month ago but below $2 into the start of last August.
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