YA'LL SEEN THIS?
Options Buzz: Options Traders Rediscover Iomega Calls
By Dan Colarusso and Gregg Wirth
Staff Reporters
4/22/98 1:21 PM ET
After month upon month of battering Iomega (IOM:NYSE), investors may be wondering if it's time to give the former highflyer a chance to regain its wings.
Iomega, supplanted only this week by K-tel (KTEL:Nasdaq) as the '90s bull market poster child, is enjoying some good feeling in the nation's options pits. Traders are staking out some inexpensive, mildly bullish positions.
With its shares trading up 11/16 to 9 1/8, Iomega's call options were among the volume leaders in this morning's trading. Heading the pack were the May 10 calls, with traffic of more than 7,000 contracts. But not all traders focused on the near-term options. More than 2,600 of the August 10 calls changed hands and jumped 7/16 ($43.75) to 1 3/16 ($118.75) by noon.
Iomega's options were busy yesterday, too. The May 7.5 calls posted volume of 6,500 contracts and the May 10 calls traded 2,844.
Some strategists warned, however, not to read too much bullishness into the Iomega activity. "At some of those prices, you can almost ignore the volume," said 1010WallStreet analyst Paul Foster. "Maybe the stock is valued low enough for it to be taken over or maybe it's the news that the company is selling some technology to Rockwell (ROK:NYSE)." The price of the May 10 calls was on the light side but did double, rising 3/16 ($18.75) to 3/8 ($37.50).
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OPTIONS BUZZ ARCHIVE
Iomega
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