Andrea Kramer (akramer@sir-inc.com) Today is the day "shock jock" Howard Stern is slated to announce whether or not he'll renew his contract with Sirius XM Radio Inc. (SIRI), according to Benzinga.com. Speaking at the Bank of America Merrill Lynch Credit Conference today, Sirius CFO David Frear cautioned that because Stern has "unique content," he "could choose to go somewhere else."
As the tension builds, many SIRI speculators have taken to the options pits to place their bets on the stock's post-announcement trajectory. Garnering the most attention so far has been the equity's in-the-money November 1.50 put, which has seen roughly 5,350 contracts change hands. However, with more than 8,400 puts already docked at the front-month strike, and with nearly all of the volume traded between the bid and ask prices, we can't yet tell whether the activity consists of pre-expiration profit taking or eleventh-hour bets.
Meanwhile, the security's out-of-the-money January 2012 2-strike call has seen nearly 5,200 contracts cross the tape ? 81% of which traded at the ask price, suggesting they were bought. However, this LEAPS strike is by far the most popular among any options series, with more than 255,000 calls already in residence. In other words, we can only guess as to how much of today's volume will translate into newly opened bullish bets.
In early afternoon trading, the shares of SIRI have powered 3.7% higher to flirt with the $1.40 level. From a longer-term perspective, the equity has rallied more than 125% in 2010, and is perched atop support at its 10-week moving average.
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