Takeover chatter has lifted Cablevision, and traders betting on
optionMONSTER's tracking programs detected two large transactions
in the cable-television stock today. First, traders sold 5,000
August 16 puts for $0.30 in volume far above the previous open
interest of just 159 contracts, clearly showing that this is a new
is now on the hook to buy CVC shares for $16 if they're below that
level on expiration. But above $16 he or she will keep the $0.30
premium as the puts expire worthless. (See our
section for more on the strategy, which makes money from the
passage of time
rather than a directional move.)
More option paper hit barely an hour later as traders gobbled up
7,300 August 19 calls, mostly for $1. Volume was more than 14
times previous positioning, indicating that new positions were
lock in the price where shares can be purchased, giving them
potentially significant leverage to a rally.
CVC is up 1.52 percent to $18.72 in early afternoon trading and has
gained 25 percent in the last week. Most of that surge was trigged
by a Bloomberg report that Charter Communications was considering a
takeover of the company.
Total option volume is more than quadruple the daily average so far
in the session.
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