Huge Options Trade in SIRIUS XM Mutes M&A Hope (SIRI)

Media

Published: April 10, 2012 11:20 am

Last Updated: April 27, 2020 11:21 pm

SIRIUS XM Radio Inc. (NASDAQ: SIRI) has such a low share price that it has often been called a bit of a call option rather than a normal stock. It is between $2.00 and $2.50 per share and it usually is on the NASDAQ most active stocks. That is without surprise given that it has such a low share price, a cult stock following, and considering it has over 20 million paid subscribers using the service with more subscribers coming on almost each and every quarter. So what happens when SIRIUS XM turns out to be the most active stock option chain as well?

Today’s unusual options trading was out in the January-2014 $2.50 Calls. We have seen some 25,000 options contracts trade, which is 2.5 million shares worth of exposure on a fully leveraged basis. This appears to be a new position as well because the open interest was 15,093 contracts before today.

The 25,000 options contracts were on the bid rather than the ask, meaning it was a sale of some sort rather than someone buying speculative calls. Whether or not this was a hedge or just a high premium capture is hard to know, but most likely it is at least one big bet that a high-premium buyout is not coming here. This may just mute some of the old and recent buyout rumors which we generally considered more as “hope” than reality.

JON C. OGG

The Average American Is Losing Their Savings Every Day (Sponsor)

If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.

Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.

But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.