Options volume in BCE Inc (BCE, news, chart, volatility) is running ten times the usual, with 14,000 calls and 8,000 puts traded. BCE is down $11.52 to $19.76 on concerns about the fate for the largest leveraged buyout ever. Those worries were sparked by an assessment by KPMG that concluded, based on the amount of indebtedness involved in the LBO financing, it does not anticipate a deal by the effective date of the privatization by December 11, 2008. However, BCE disagrees that “the addition of the LBO debt would result in BCE not meeting technical solvency definition,” according to CFO Vanaselja. Nevertheless, the stock is taking a hit and, in the options market, sentiment is mixed, with a flurry of activity as the stock sank early, but now signs that the panic easing. December 25 puts are being sold in recent trade. The top trade of the day is 1,000 lot of December 25 calls hitting above the offer for 90 cents per contract.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.