Thursday October 29, 07:42 PM
RPT-STOCKS NEWS US-Sun Micro calls in play before EU decision
Stocks on the move
Real (Frankfurt: BJU.F - news) -time Equity news
U.S. stock market report
1449 ET 29Oct2009 Sun Micro gets
call spread ahead of EU decision
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One trader in Sun MicroSystems (NASDAQ: JAVAD - news) initiated a bullish call spread
ahead of an expected EU decision regarding Oracle (NASDAQ: ORCL - news) 's bid for JAVA. The investor
bought 30,000 calls at the Jan 2010 $7.50 strike for $1.30 and spread that
against the sale for the same amount of calls at the higher Jan $9 strike for
25 cents, said Interactive Brokers Group analyst Caitlin Duffy. If shares rise
at or above $9 by January expiration, the investor would pocket 45 cents per
contract for total profits of $1.35 million, she said. The European Union told
Oracle Corp last week that it has failed to ease competition concerns over its
$7 billion acquisition. JAVA shares rose 2 cents to $8.20 after ranging between
$9 and $9.20 since April when the deal was announced, said optionMonster
analyst Chris McKhann on the Web site. 'This trader clearly sees this deal
getting done at that $9 level that had been priced in before last week,' he
said. The spread could either be a roll down in strikes or a straight purchase,
said WhatsTrading.com strategist Frederic Ruffy.
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