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Minyan Mailbag: Jon Najarian


Thx Dr. J!


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.

  • Cablevision (CVC) trading volume has heated up, with over 50,000 calls and puts changing hands as CVC falls 4.6% to $26.56. The catalyst for today's selloff is CVC jumping into the running for Adelphia with an astonishing $16.5 billion CASH bid, that's right, CASH, which as Yogi Bera says spends just like money! The out-the-money puts in CVC are moving up in value as CVC dives, but its the action in the way, way out-the-money puts, particularly the January 2007 10 puts that indicate the fact that this bid is scaring some CVC investors. Think about it folks, the Jan '07 10 puts are indeed disaster protection, but not the ones you'd pick if you were protecting your CVC stock holding. No, this sort of trade is similar to the trades we tracked in GM, where the bondholders were hedging by purchasing the way out-the-money puts as well.

  • DELL trades 2,400 calls versus 18,000 puts, but my dollar weighted numbers show just $4 traded on each put versus $1 on each call.

  • With Sprint (FON) trading $23.29 someone paid $.75 for the August - January 25 call spread. 15,000 of the Aug options were sold and 15,000 of the Jans were purchased.

  • A very nice rally in small cap stocks today is pushing the Russell 2000 (IWM) index up 1.08 to 123.39. I show both April & May puts trading actively, with the May 124 puts losing $1.50 to $3.10 (-32%) and the 121 puts losing $.85 to $1.85 as well.

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No positions in stocks mentioned.

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