Sirius Call Options Volume Continues

As Sirius retraced back to a support level Monday the options volume continues. I will only list the strikes with a relative open interest.

June Calls 1.00 strike 1,600 contracts

Sept Calls 1.00 strike 10,000 contracts

January 2010 calls 2.5 strike, 4,000 contracts

We can look at this information in a few ways.

The obvious is that there is a belief that the stock will meet or exceed these prices because the company is on steadier ground. The price chart seems to be doing all of the right things, following the moving averages, completing the continuation pattern, retracing back to support, etc. Not something we should take as scripture but it obviously carries some validity considering the past 2 weeks.

On the other hand we are talking about options with a price of .05 to .10 per contract, which could simply mean that the bears are buying insurance policies because they feel the price action could be more than just a short squeeze so it is hedge time.

But then again at 10,000 contracts we are talking about one million shares. Not chicken feed. So maybe we are really talking about some bulls that are beginning to snort and paw at the dirt.

It is anyone's guess. In any case, the next few months will be interesting. Flap the cape Mel, let's see what you got. TORO!

Disclosure: Long Sirius

Comments

[matty3000:]

I like your style Gino. It has a more calming, optimistic tone than that of Brandon or Tyler. Keep writing positive things.

Long Siri

Apr 21 03:56 PM

[Play:]

What is happening to OI? And what is the Put/Call Ratio? These may have more bearing the volume.

Apr 21 05:05 PM

[JKA:]

It seems anyone can write here!
No wonder the economy is in such a mess with "analysts" like this.
You are supposed to be an analyst, so provide an analytical view.
Naturally if people are buying calls, they expect share price to increase. Or shorts are hedging. But what happened to the fundamentals of the company? Can the company be a take over target? Why? What has changed since the stock hit $0.04 or so? Has its future panorama changed so drastically to warrant a 12 fold increase? Yes, we all know time will tell and that's the difference between descriptive and analytical articles.
By providing decent analysis, may be next time I'll read your article instead of just moving on.
Provide an opinion.

Apr 21 08:11 PM

[Play:]

The problem with looking at Call Volume is that you don't know if people are buying or selling. Shorts can just as easily sell OTM Calls and wiat for them to expire worthless. At a $1/share strike, SIRI needs to move pretty far to get them ITM.

Apr 22 09:00 AM