Trade bets on blockbuster in Lions Gate
A large trader is hoping that Lions Gate Entertainment will end the year with a bang.
optionMONSTER's tracking program detected the purchase of 3,000 December 21 calls for $2.10 and the sale of 3,000 December 25 calls for $0.60 yesterday. Volume was above open interest in both strikes, showing that this is new positioning.
This vertical spread is looking for LGF to rally above $21 by expiration in mid-December. The sale of the higher-strike contracts reduces the cost of the long calls but limits potential gains, as the trader will be obligated to sell shares if they rise above $25. (See our Education section)
LGF rose 1.94 percent to $21.54 yesterday and is up 8 percent in the last three months. The movie studio is expected to report earnings after the close on Nov. 3.
Overall option volume in the name was twice its daily average yesterday. Calls outnumbered puts by a bullish 53-to-1 ratio.
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