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Minyan Mailbag: Jon Najarian


Thx Dr!


Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next article, written by Minyan Jon Najarian, with that very intent.

For more of Jon's work
click here.

  • The warning from Verizon (VZ) to MCI Inc (MCIP) that they may bow out rather than be forced to match competing bids from Qwest isn't throwing cold water on MCIP calls, at least not yet! Although I show someone pretty big doesn't think the takeout price will be over $25.60, as that big someone sold the June 25 - 27.50 call spread 35,000 times! They collected about $.60 for that spread, so if the takeover occurs at $25 or less, they keep that $2.1 million in premium they collected. In all likelihood the seller is some arbitrageur protecting some of his or her gains, but the trade was large enough that I thought you should know!

  • Sears Holdings (SHLD) options are on my watch list for the third session in the past four with 16,000 calls trading against 10,000 puts. I would be hard pressed to find a better option trading class than SHLD, as today's range for SHLD is over $7.70, hitting $149.50 within the first two hours of trading. My dollar-weighted index shows over 3:1 in favor of the calls as SHLD continues to defy gravity and move higher.

  • Apple (AAPL) is putting in another stellar session, gaining 2.5% at mid-session and the options markets are reflecting that bullishness, with 68,000 calls trading against 13,000 puts. I show the May 47.50 calls moving up agressively, showing a gain of $.40 to $1.20 on 12,000 contracts and the April 45 calls trading up 60% to $.80 on volume of 15,000 options.

  • Very bullish trading in Pfizer (PFE) as it moves up 3.20% to $26.76. I show 50,000 calls changing hands versus 15,000 puts, with a dollar-weighted ratio of 9:1 in favor of the bulls. I think the bullishness centers around the cost-cutting PFE said would save $4 billion by 2008. The April, May and June 25 and 27.50 calls are all actively trading today.

  • The mini-Nasdaq (MNX) options are more active than usual today, with 17,000 calls and 18,000 puts changing hands.
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No positions in stocks mentioned.

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