I'm wondering about the person who bought those 3600 August 30 calls. I wouldn't be surprised if this person expected a big move from the UK announcement...and must now be sweating as half a million dollars of his may expire worthless next week (he can get out now with about a quarter million dollar loss) Another possibility is that those contracts were a hedge against a 360,000 share short position. I'm still looking for a more favorable price to enter long in force...I think I'll start buying again in later this month.
I started buying FDX LEAPS the other day. I think the UPS strike will have a long-term positive influence on the company's earnings, as many former UPS users, happy with FedEx's service, stay with FedEx even after the strike. It's rather amazing when you think about the degree to which the freight industry has become a sellers market...UPS shipped 80% of domestic parcels, and now their operations are virtually at a standstill, so the competition could see a 5-fold increase in business if they had the capacity. I think each day the strike continues, FDX will gain a point. The Wall Street reaction to the UPS strike, in terms of UPS' competitors, has been rather lukewarm so far. In the meantime, FedEx has so much business they're turning away customers. I can't think of any time, except when a certain item was subject to federal rationing (sugar during WWII, gas during oil embargo), that a potential customer was actually turned away. |
