Big bet on Central European Media


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Central European Media Enterprises has been dropping for years, but one investor apparently thinks that it might have a dramatic turnaround.

optionMONSTER's Heat Seeker monitoring system detected the purchase of 3,937 July 7.50 calls for $0.10 against open interest of 1,124 contracts. The transaction dominated activity in the broadcaster, which normally trades fewer than 150 contracts in a typical session.

CETV is down 3.46 percent to $3.91 in morning trading. It peaked over $120 during the peak of the emerging-markets bull market in 2007 but has been falling since as profitability collapses. It also has a heavy debt load and trades for only half its stated book value.

Those long calls lock the price where investors can buy shares through the summer. They're so cheap because the stock is far below the strike price but could generate huge leverage if CETV rallies strongly. The investor may be looking to protect a short position or be speculating on a news event like a potential divestiture or acquisition. (See our Education section for more on how options can be used to manage trades.)

The company owns 34 television stations across central and eastern Europe.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Options

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