Morgan Stanley likes Groupon, and one big investor is seconding
optionMONSTER's Heat Seeker monitoring system detected the purchase
of about 7,300 November 12 calls for $0.95. Equal numbers of
contracts were sold in the November 9 puts for $0.50 and the
November 16 calls for $0.20. Volume was well above open interest at
all three strikes, indicating that new positions were initiated.
The trade is a bullish three-way combination. It cost $0.25 and
will inflate to $4 if the e-commerce stock closes at or above $16
on expiration--a potential profit of 1,500 percent. The investor is
also on the hook to buy shares for $9 if they drop below that
level, so he or she could lose plenty of money in the event of a
sharp selloff. (See our
section for more on the perils and benefits of
GRPN is up 5.59 percent to $10.87 in early afternoon trading after
Morgan Stanley boosted its rating to "overweight," predicting an
improvement in the company's business. The shares had consolidating
and bounced around $9 before that recommendation.
Total option volume is quadruple the daily average so far in the
session, according to the Heat Seeker.
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