Trade loosens reins on Liberty Global

Shutterstock photo

Liberty Global is running, and one trader is loosening up the reins.

optionMONSTER's tracking systems detected the purchase of 7,000 October 32.50 calls for $1.05 against existing open interest. At the same time, a new block of 7,000 January 34 calls was sold for $1.20.

LBTYA The trade was probably the work of an investor who owns the shares, and it can profit in two ways. First, the trader gets to keep the $0.15 difference between the two premiums.

Secondly, the investor will receive an additional $1.50 on the shares if LBTYA closes at or above $34 on Jan. 21. In return for the additional money, the trader must assume the risk of owning the stock for three months longer.

LBTYA rose 3.02 percent to $33.48 on Friday and is up 13 percent in the last month. The provider of Internet service in Europe, Japan, and Chile has been climbing on strong subscriber growth rates as international stocks regain favor among investors.

The gains have come despite revenue missing forecasts the last time it reported results on Aug. 3 and its loss coming in wider than expected.

Total options volume in LBTYA was 24 times greater than average in Friday's session.

(Chart courtesy of tradeMONSTER)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by