"is it saying NNC/NN stock owners? sell their NNC/NN stock to buy options...I assume call options in this particular case?"
The small, midsize, and mutual funds seldom sell stocks, and rarley sell to buy options. But there are two groups of people out there that hunt for situtaions like this. {and a third subset}
1) Speculators: These are the people that look for stocks that may gap up by more each day. They look for takeover targets, and jump in by buying options... generally close expirations, and AT or in the money options. {Market makers usually buy the equity, and write the options}
2) Hedgers: These are the people that will buy a call option and short the equity, or buy the equity and buy a put option. And hope for a trend to continue.
3) Derivative: Than there are the subset of 1+2) They will buy an option, and day trade {short, and long during the day}. They get a very large leverage from this. And as the price swings, they can make a lot of cash.
BUT: 90% of NNC/NN investors will not be buying, selling options. Most will never sell, till death do them part. {Nothing wrong with that} I was watching TV earlier, and they are saying that the earnings, and todays price is a congradulations to the CEO(?) leadership.
Hope that helps. |
