Thursday July 2, 10:13 PM
STOCKS NEWS US-Motorola draws bullish option play-analyst
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1654 ET 02July2009-Motorola (NYSE: MOT - news) attracts bullish option play
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A large-volume bullish reversal initiated in the October contract on
Motorola Inc suggests some investors are positioning for a rally in the
Cellphone maker, said Andrew Wilkinson, market analyst at Interactive Brokers
Group in a note. Its shares fell 27 cents to $6.19. He noticed that 15,000 puts
appeared to have been sold at the October $5 strike for 14 cents apiece to
partially fund the purchase of 15,000 calls at the October $7 strike for 34
cents per contract. The net cost of the bullish stance amounted to 20 cents.
Using a reference stock price of $6.25, Motorola shares would need to rise by
15 percent to $7.20 for investors to profit by expiration. 'Interestingly, it
appears that today's reversal has been added to similar bullish positioning as
seen in the open interest at each of the strike prices described,' he said. The
action could be the work of a player who is adding to a position or perhaps
traders hopping on the bull bandwagon.
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