Financial News

Call Buying On Sprint Amid Session Lows Well-Played As Shares Rebound

      Today’s tickers: S, GS, RIMM & CCL S  - Sprint Nextel Corp. –  Seemingly well-timed call buying on Sprint in the first hour of the trading session has seen the value of options held by one or more bullish investors appreciate intraday. Shares in Sprint Nextel Corp. fell as much as 17.6% this morning to touch down at a new 52-week low of $2.25, but have since fought their way back to rally 2.2% to $2.79 just after 12:35 pm EDT. The stock tumbled this week on news the third-largest U.S. wireless carrier is committed to buying at least 30.5 million iPhones over the next four years, a deal estimated to cost around $20 billion, as reported in today’s Wall Street Journal. Concerns regarding the terms of the deal were reflected in the steep selloff that ensued in Sprint shares. But, activity in Jan. 2012 contract call options this morning suggests some traders were ready to position for a rebound in the battered stock. It looks like investors purchased around 18,400 calls at the Jan. 2012 $2.5 strike for an average premium of $0.57 apiece, against previously existing open interest of 9,650 contracts. The calls that had earlier cost an average of $0.57 to purchase now require $0.76 per contract roughly two hours later. Premium on the calls should continue to rise should Sprint’s shares extend their recovery in the months remaining to January 2012 expiration. Options traders populating Sprint Nextel Corp. are trading roughly three calls on the wireless provider to each single put in action. Options implied volatility is up 30.3% to arrive at 119.8% this afternoon. GS  - The Goldman Sachs Group, Inc. –  Shares in Goldman Sachs are well off their lows of the session, having earlier dropped as much as 6.45% to a 31-month low of $84.27. The stock remains firmly in the red, however, down 2.1% at $88.18 as of 11:30 am in New York. Not surprisingly, options on financial stocks and the XLF are some of the most active…

     Today’s tickers: S, GS, RIMM & CCL

S - Sprint Nextel Corp. – Seemingly well-timed call buying on Sprint in the first hour of the trading session has seen the value of options held by one or more bullish investors appreciate intraday. Shares in Sprint Nextel Corp. fell as much as 17.6% this morning to touch down at a new 52-week low of $2.25, but have since fought their way back to rally 2.2% to $2.79 just after 12:35 pm EDT. The stock tumbled this week on news the third-largest U.S. wireless carrier is committed to buying at least 30.5 million iPhones over the next four years, a deal estimated to cost around $20 billion, as reported in today’s Wall Street Journal. Concerns regarding the terms of the deal were reflected in the steep selloff that ensued in Sprint shares. But, activity in Jan. 2012 contract call options this morning suggests some traders were ready to position for a rebound in the battered stock. It looks like investors purchased around 18,400 calls at the Jan. 2012 $2.5 strike for an average premium of $0.57 apiece, against previously existing open interest of 9,650 contracts. The calls that had earlier cost an average of $0.57 to purchase now require $0.76 per contract roughly two hours later. Premium on the calls should continue to rise should Sprint’s shares extend their recovery in the months remaining to January 2012 expiration. Options traders populating Sprint Nextel Corp. are trading roughly three calls on the wireless provider to each single put in action. Options implied volatility is up 30.3% to arrive at 119.8% this afternoon.

GS - The Goldman Sachs Group, Inc. – Shares in Goldman Sachs are well off their lows of the session, having earlier dropped as much as 6.45% to a 31-month low of $84.27. The stock remains firmly in the red, however, down 2.1% at $88.18 as of 11:30 am in New York. Not surprisingly, options on financial stocks and the XLF are some of the most active…
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