Wednesday November 11, 09:45 PM
STOCKS NEWS US-Investors eye Sun Micro call options
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1627 ET 11Nov2009-Sun Micro call options grab interest
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Investors eyed Sun Microsystems (NASDAQ: JAVAD - news) calls, employing strategies tied
to the timing and conditions of Oracle Corp's acquisition of Sun. JAVA shares
rose 3.93 percent to $8.47. While U.S. authorities have approved the deal,
European Union antitrust regulators on Monday said it would hurt competition in
the database market. One trade was a large bet that the deal will go off around
$9, where the shares hovered for the last six months, said optionMonster
analyst Chris McKhann on the website.
'We see one block of 35,000 of the Dec $9 calls sold for 11 cents and
another block of 5,000 just minutes later,' he said. The open interest at that
strike was 3,305 contracts, so the action represents newly opened positions. It
suggests the trader is willing to make a very large bet that shares are back
around, but not above, that $9 level by December expiration, he said.
But some also bought $9 calls that expire in December and Jan 2010 on
continued speculation the deal will get done and may be at a price that is more
advantageous to JAVA, said Joe Kinahan, chief derivatives strategist at TD
Ameritrade.
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