There is a lot of interest in Jan. 25 calls, but the numbers
I downloaded (from Lombard) are slightly different.
Here is what I got:
Month/Strike Last Vol. Open Int.
Jan. 20 4 10 2127
Jan. 22.5 2-7/16 195 5883
Jan. 25 1-15/16 3,400 11,865
Mar. 20 4-1/2 22 2088
Mar 22.5 3-1/4 15 1361
Mar. 25 2 400 4505
Still, clearly, there is a lot of open interest in the
Jan. 25, which is out of the money by over $1
with one month left. Plus, compare the Jan
prices to the March prices--there is only a
1/2 time premium for the 20's and a
negligible time premium for the 25s--these
look like much better values for options
given the extra two months.
If the Jan. prices reflect buyer demand
(as opposed to a lot of people writing calls),
which I assume they do because the
Jan. prices are squeezed towards the
March, then some people are betting
big that something is going to happen
(probably in early Jan.). I don't think
that this quarter's earning announcements
will be out by then, so that leaves
speculation on an offer for WCOM.
If I were inclined to join the upside frenzy,
I'd buy in on the March calls. Basically,
you pay next to nothing for two extra months
. So, the people buying the January calls
must figure something is going to happen
soon and be reasonably confident about it.
I'm definitely keeping my eye on
WCOM for the next month! |
