ALOG - Waiving the white flag?

Discussion in 'Trading' started by livevol_ophir, Dec 10, 2009.

  1. livevol_ophir

    livevol_ophir ET Sponsor

    The company averages 220 option contracts traded a day; it has traded over 5,000 options with an hour to go. The big trade was a 5,000 lot - a sale of the Jan 40 calls @ 0.25.

    The OI in the Jan 40 calls is small(ish) - the trades today were opening. However, OI in the Jan 45 calls is large - about 5,000.

    I found the date that the Jan 45 calls traded. You can see those calls were also sold 4500x. They traded 0.35 versus 0.30 x 0.55 market (very likely a sale).

    The stock price has been plummeting over the last week - and continuing to do so after earnings.

    Even though stock has traded much more actively today I do not think these calls are trading tied to stock (I don't actually know for sure). The company confirmed its 0.10 dividend ex in January. The company has disapointed for the last three quarters. Further, the company has a total of 0.08 in earnings in six months and they have paid out 0.20 in dividends.

    I'm not sure what's going on, but looking at the dipping stock chart, consecutive missed earnings, a dividend payout that is 250% of earnings over the last 2 cycles and 10,000 calls sold in six calendar days. Kinda looks like they are waiving the white flag...

    You can see all the details, trades, prices, charts in my blog: