Sirius Satellite (SIRI) is flat at $2.93 and one investor writes a serious Nov 3 straddle on the satellite radio operator midday Friday. 48,000 Nov 3 puts were sold on the stock at 7 cents per contract and 48,000 Nov 3 puts at 19 cents. The position, at 26 cents, is opening and comes ahead of the company’s Oct 30 earnings report. More than 50,000 now traded in both contracts and the premium selling seems to reflect the view that SIRI will remain near $3 over the next four weeks. The stock saw a 4.5 percent move higher on 8/7 when earnings were last reported, to $2.30, and have rallied another 27.4 percent since that time. A 52-week high of $2.94 was recorded yesterday and the stock has not traded north of $3 since early-2008. Meanwhile, 30-day ATM volatility in SIRI options is down 13 percent to 37.5 on the premium selling today.
About the Author (Author Profile)
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.