Wednesday, September 27, 2006

Schaeffer's Research Comments On Sirius Options

Schaeffer's Daily Market Blog Features: Gap, Sirius Satellite Radio, Newmont Mining, StreetTRACKS Gold Trust, Reynolds American

Among the stocks featured in the September 27 edition of Schaeffer's Market Blog are Gap (NYSE:GPS), Sirius Satellite Radio (NASDAQ:SIRI), Newmont Mining (NYSE:NEM), StreetTRACKS Gold Trust (NYSE:GLD), and Reynolds American (NYSE:RAI)...

...1:24 PM Options Surging on Sirius
With Howard Stern now reiterating (ad nauseam) that he isn't going anywhere now or ever (despite recent erroneous claims in the press to the contrary), investors feel confident in putting some additional speculative money into Sirius Satellite Radio (NASDAQ:SIRI) . What's more, speculative players are looking long term, trading large blocks on the January 2008 5 strike (YFW AA) and the January 2009 5 strike (OAJ AA). More than 14,000 options have traded on each of these out-of-the-money strikes in today's trading. Prior to today, these long-term calls were home to 99,000 and 9,900 open positions, respectively.
Given the similarity in volume and strike price, it is likely that this volume is related. Sure enough, a quick check of the trade details reveals two blocks of 7,000 contracts apiece that crossed the tape shortly after 1:00 p.m. on the 2009 call position, trading near the bid price. These two blocks were each designated as a "spread." The 2008 position saw one block of 14,000 contracts go off between the bid and the ask price at the same time. Naturally, this was also flagged as a "spread."
SIRI shares have certainly seen better days; the stock has slumped more than 90 percent from its March 2000 peak. The stock continues to fight with resistance from its 10-week and 20-week moving averages. Options players aren't merely interested in LEAPS positions; the front-month series is home to more than 10,000 open calls at the out-of-the-money 4 strike, while the December series boasts heavy open interest on the 4 and 5 calls...READ MORE: HERE

9/27/2006 08:52:00 PM

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