Seriously big trade in Sirius XM Radio options this morning as a trader bought the Jan 2.5-3 risk reversal (buying calls) nearly 25000x for a 2cent debit on the PHLX as shares traded at 2.77. SIRI shares flirted with the $3 price point ahead of earnings last month but never got there, and todays trade appears to be a clear directional bet that shares will stay safely above the 2.50 level, and potentially break $3- a level not seen since March 2008. SIRI option volume was also very heavy on 10/19 as a cust sold nearly 50000 Nov 3 straddles for 26cents- those are still open.
About the Author (Author Profile)
Henry Schwartz is the president of Trade Alert LLC, a provider of real-time options analysis tools to leading Wall Street firms. His systems analyze hundreds of thousands of transactions per second to help professionals identify and interpret market activity in real time, supporting informed trading decisions and intelligent idea generation. He has held institutional trading and management roles with Bank of America, Bear Stearns, Salomon Brothers and the Hull Group, and made markets on the CBOE and AMEX floors in the US, and EUREX and MONEP overseas. Prior to founding Trade Alert, he led the electronic market-making group at Bank of America coincident with the launch of the International Securities Exchange. He received his bachelor’s degree in Economics from the University of California, San Diego and his MBA from NYU’s Stern School of Business.