In addition to my own scans and watch lists, I use two main sources to follow options-related news: Daily Seeking Alpha columns by Frederic Ruffy and Andrew Wilkinson. While I get great use out of these sources and have even made money thanks to them, you have to be careful not to chase the stocks or options they mention. Often, by the time you receive an alert or summary, contracts have already had too much volatility and upside priced into the premium. Nevertheless, occasionally, you can find examples to capitalize on. Below I detail options brought to my attention by these sources and how investors might consider playing them - or the underlying security - if at all, during the trading week.
Two stocks in today's options' report populated a previous week's look at Friday options' activity. Both merit another look today.
Sprint-Nextel (S): In late March, S got hit quite hard on the AT&T (T) and T-Mobile (OTCQX:DTEGY) merger news. At the time, Wilkinson highlighted bullish options activity as Sprint began bouncing off of its lows. In reaction to that news, and with Sprint's share price under $5.00, I noted that I would be "comfortable" buying in- or at-the-money calls with May and June expiration dates. As it turns out, that type of play would have worked out well for you. The S May $4.50 calls, for instance, traded at roughly $0.37 each one month ago. As of late in the trading session this Friday, the bid sits at $0.70.
Once again, with Sprint hitting a new 52-week high of $5.35 during the day on Friday, Wilkinson points out optimistic options trades in Sprint. While I have been known to trade the same stock or option several times, even during the same day, I also do my best not to go to
