Markets

Calls channeling Sirius XM again

(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service Friday.)

The bulls are coming back to Sirius XM after tripling their money in the satellite-radio company earlier this year.

optionMONSTER's Heat Seeker system detected the purchase of 22,000 June 4 calls on Friday, most of which priced for $0.12. Volume eclipsed previous open interest of 8,421 contracts, an indication that new money was put to work.

Long calls lock in the price where investors can buy a stock, which lets them profit from a move while risking only a small fraction of the capital needed to own common equity. (See our Education section)

SIRI rose 0.25 percent to $3.94 on Friday. The March 3.50 calls lit up our monitors back on Dec. 22 for just $0.13 as the stock worked its way out of a yearlong consolidation pattern. It then moved nicely higher, and those calls were worth more than $0.50 by early last month.

Shares have consolidated since and are now trying to bounce near their 50-day moving average, which could make some chart watchers think that more upside is coming. Earnings are due April 28.

Total option volume was 14 times greater than average in the session, with calls outnumbering puts by a bullish 94-to-1 ratio.

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.


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

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