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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (2709)	3/22/2011 11:45:29 AM
From: richardred	Respond to of 7256

Positive Analyst Comments Fuel Front-Month Call Activity on St. Jude Medical Author Andrea Kramer (akramer@sir-inc.com) 3/22/2011 11:07:35 AM St. Jude Medical (STJ) has been popular among call traders today, thanks to a bullish brokerage note from J.P. Morgan. More specifically, the analysts said the Street is underestimating the impact of the company's new type of cable – expected to debut in the U.S. mid-year – which they claim will be the most important product to hit the implantable defibrillator market in nine years. As such, the brokerage firm said STJ should gobble "meaningful share" from competitors like Boston Scientific (BSX). As a result of the encouraging comments, the shares of STJ have skyrocketed more than 6.6% to tag a new five-plus-year high of $51.71. As such, it appears a handful of near-term bulls may be cashing in their proverbial chips on the stock. So far today, STJ has seen more than 3,200 calls cross the tape – almost three times its expected daily call volume, and around seven times the number of STJ puts exchanged. Garnering the bulk of the attention has been the now-in-the-money April 50 call, which has seen around 1,100 contracts change hands – most of which have traded at the bid price, suggesting they were sold. Elsewhere, the out-of-the-money April 55 call has seen almost 1,000 contracts change hands – 96% of which crossed at the ask price, hinting at buyer-initiated activity. However, the 55 strike is already home to nearly 3,000 calls outstanding. In other words, we can't yet tell how much of today's volume will translate into newly opened bullish bets. schaeffersresearch.com