Traders are debating the future of Cablevision, but the tone is mostly bullish.
The stock fell hard on Friday after Chief Operating Officer Tom Rutledge unexpectedly quit, leaving the company adrift after a wide earnings miss in late October. It finished the day down 8.47 percent to $12.75, snapping back from an earlier loss of 17 percent. (See researchLAB for key events)
The largest since trade was a put credit spread , with 6,000 January 13 contracts sold for $1.30 and an equal number of January 10s bought for $0.20. The investor pocketed $1.10 in the process and is betting that CVC will close above $13 on expiration. The maximum loss is $1.90 if it falls to $10 or lower.
Additional puts were bought soon after at the January 10 line for $0.15 and $0.20, which was probably the work of a different trader looking for the stock to keep falling.
In another large transaction, 3,000 December 15 puts were sold for $3 and an equal number of January 13s were bought for $1, but volume was below open interest. This suggests that an investor had previously bought a bearish put spread , looking for a drop, and took profits following the selloff.
Finally, in the afternoon, almost 2,500 January 18 calls were purchased for $0.10 in a new opening trade. Those long calls appear to be cheap bets that CVC will experience a big rebound over the next five weeks. (See our Education section)
Overall activity was heavy in the name, with more than 38,000 contracts trading compared with the 718 average total in a normal session.
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.