One trader apparently believes that Sotheby's is going back to
its old highs.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 3,000 January 55 calls for $2.20 and the sale of a
matching number of January 60 calls for $0.70. Volume was more than
quadruple the previous open interest at each strike, indicating
that a new position was initiated.
Known as a
bullish call spread
, the trade cost $1.50 and will inflate to $5 if BID is at $60 or
higher on expiration in mid-January. That's roughly the same level
where the auction company peaked in 2007 before the financial
crisis. The spread would turn a 13 percent move in the stock price
into profit of 233 percent. (See our
BID rose 0.72 percent to $52.96 yesterday and is up 73 percent in
the last year. It's been been climbing against heavy short
interest, despite weak quarterly profit, as the nouveau riche in
China and the Middle East clamor for fine art.
The date of the next earnings release hasn't been announced, but
last year's calendar suggests that it will occur in early November.
Total option volume was quadruple the daily average, according to
the Heat Seeker. Calls outnumber puts by 16 to 1.
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