COGN , what is going on

Discussion in 'Options' started by IV_Trader, Dec 1, 2006.

  1. with this pos ? An amazing 2000bp gains in DEC ( not reporting) month in few days , very heavy 45 calls volume ( COGN at 40) . Are criminals buying ahead of buyout ?
  2. The 45 calls today were 62% bought on the ask, 38% sold on the bid. That's rarely the sign of insider knowledge--usually you'll see the vast majority on one side.

    Still, overall volume is pretty bullish.

    Jan & Dec 35P
    Dec 35P
    Dec 37.5P
    Jan 40P

    all have been almost exclusively sold.

    Jan 40Ps so far are the largest dollar sink/source from options. $173k more in premium was sold than purchased at that strike.

    Jan 35Cs were 100% purchased for $126k in premium.

    Bullish outlook, but nothing "odd" here.
  3. FA , thanks for an bid/ask breakdown ; I don't have this info. I just happened to be in JAN vega trade and noticed this unusual ramp in DEC vols...
  4. That's a reasonable point I didn't see until I reread your post--earnings are after Dec expiration. Why a 100% OI turnover in Dec 45 calls?

    I don't think it's an insider due to the somewhat neutral balance of buyers and sellers, but still--14 days to move at least 12%? Without earnings to help?

    Lots more volume on those 45 calls since my last post, they're now 59% bought, 41% sold.

    Is there a risk they'll preannounce or something? The IV on December is nuts for a scheduled earnings date after expiration.

    -Dec 45C +Jan 50C is free and seems reasonable.
  5. FA , exactly ! Plus the 2000bp ramp on DEC in 3 days , very weird !
  6. Weighted average IV for Dec in the 53% range--are you saying they were 33% 3 days ago, or 42%?
  7. it was low 40th...Yes , current vols are around 53 , but only one hour ago it was weird...and crazy volume is still going on , huge transactions