Several large consumer-technology stocks have bounced recently
after long selloffs, and one trader is betting that Sony is joining
optionMONSTER's Heat Seeker tracking system detected the purchase
of more than 5,000 January 11 calls for $0.15 yesterday. Most of
the activity took place in about 5 minutes, suggesting that it was
the work of a single investor.
lock in the price where shares can be bought in the once-mighty
Japanese electronics firm. These options were particularly
inexpensive and have the ability to provide huge leverage in the
event of a rally, but they will expire worthless if the stock
doesn't move by mid-January. (See our
SNE rose 3.44 percent to $10.23 yesterday. The stock has been
trending lower for the last five years and has lost more than half
its value since mid-March. That selloff has brought the stock back
to its lowest levels since 1987, and yesterday's call buyer
apparently thinks that it's ready to rebound.
Other big tech stocks recently have made similar moves.
have handed traders gains of 300 percent in recent weeks, while
Research In Motion has generated even bigger profits. All three of
those stocks had fallen to long-term lows before they pushed
SNE also trades for about half of book value and has little net
debt, which could make some investors think that it's now a safe
Total option volume in Sony was more than triple its daily average,
with calls outnumbering puts by a bullish 24 to 1.
(A version of this post appeared on
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