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Media

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

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By Jon C. Ogg Updated Published
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Sirius XM
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

Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. a673b.bigscoots-temp.com.

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