Och-Ziff Capital is not a name that often sees unusual option
activity, but yesterday its trading lit up our screens.
optionMONSTER's tracking systems showed early buying in the
September 7.50 calls, with about 5,000 purchased in the first 15
minutes of the session for $0.40. Volume was more than 6 times the
open interest in the strike at the beginning of the day, indicating
that these were new positions.
Those calls lock in the price investors must pay to buy shares in
the hedge-fund operator. They can generate some nice leverage in
the event of a rally but will expire worthless if the stock doesn't
move before they expire.
That leverage was already at play yesterday because OZM was up
about 3 percent when the options hit. The stock continued marching
higher throughout the session and ended up 12 percent at $7.94.
Those calls, meanwhile, inflated 50 percent to $0.60.
OZM has been falling for a long time and was building support near
its lowest level in more than three years. But then it rallied
after earnings and revenue beat analyst estimates.
Overall option volume was 47 times greater than average in the
session, with calls outnumbering puts by 8 to 1.
(A version of this post appeared on
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.