Day 2 of the GOOG to buy CNET rumor. Actually, this is the recent round of rumors here. This deal rumor has been on going for months now . There must be many bored players out there for this kind of volume in the stock and options to take place. Nearly 25,000 options traded here today with the 10 line calls in focus. March saw the heaviest trading with almost 13,000 contracts on the tape and the balance split almost evenly between Feb. and Apr. Volatility spiked from 57% to 104% in Mar.
Traders bought cheap dollar lottery tickets in Feb with only 5 trading days left to expiration paying up to .30 (175% vol). Because expiration is so near and the options are dollar cheap, the vol in Feb is not relevant in my mind anymore. The options are priced as a binary event so I look at them as an all or nothing proposition.
Earnings were reported on Feb. 5th and were tepid at best. The company also announced a new CFO. Cnet is also being circled buy hedge funds and activist investors all clamoring for board seats. The company has responded by putting a 15% stock dilution poison pill at an unspecified discount into place to thwart a hostile takeover ( or at least make it more expensive).
I believe sometimes that the activist investors are responsible for these rumors to draw attention to their situation. I could be guilty of feeding into their plans. I’m just calling them as I see them.
Traders bought cheap dollar lottery tickets in Feb with only 5 trading days left to expiration paying up to .30 (175% vol). Because expiration is so near and the options are dollar cheap, the vol in Feb is not relevant in my mind anymore. The options are priced as a binary event so I look at them as an all or nothing proposition.
Earnings were reported on Feb. 5th and were tepid at best. The company also announced a new CFO. Cnet is also being circled buy hedge funds and activist investors all clamoring for board seats. The company has responded by putting a 15% stock dilution poison pill at an unspecified discount into place to thwart a hostile takeover ( or at least make it more expensive).
I believe sometimes that the activist investors are responsible for these rumors to draw attention to their situation. I could be guilty of feeding into their plans. I’m just calling them as I see them.
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