DV closed Friday trading at $45.99, up 14.0% on earnings. The Symbol Summary is included below.
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This is one of those notes I don't love writing, but feel compelled to because there may be some impropriety. Let's start and end with simply the facts.
First, two year stock chart is below.
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FACT #1: The stock hit a multi-year high (in fact it's a three year high); so a level not seen since 2011 off of its earnings release.
Now let's turn to the Stats Tab, below.
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FACT #2: The company averages 91 calls total traded a day on all strikes in all months.
Now let's turn to the open interest chart of the May 40 calls.
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FACT #3: The OI in the May 40 calls jumped 4-fold in a single day on 4-16.
Now let's turn to the Options Tab on close of 4-16-2014.
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FACT #4: 1,068 May 40 calls traded for ~ $1.80, meaning approximately 1100% of the total daily average call volume across all strike and months traded in that single strike.
And finally, the Options Tab on close Friday (4-25-2014) is below.
Provided by Livevol
FACT #5: Those May 40 calls bought for ~$1.80 are now worth ~$6.10.
So, in summary:
FACT #1: The stock hit a multi-year high (in fact it's a three year high); so a level not seen since 2011 off of its earnings release.
FACT #2: The company averages 91 calls total traded a day on all strikes in all months.
FACT #3: The OI in the May 40 calls jumped 4-fold in a single day on 4-16.
FACT #4: 1,068 May 40 calls traded for ~ $1.80, meaning approximately 1100% of the total daily average call volume across all strike and months traded in that single strike.
FACT #5: Those May 40 calls bought for ~$1.80 are now worth ~$6.10.
And...
FACT #6: If we count it as 1000 calls trading that's a $180K bet that is now worth $610K or ~240% in ten days.
Is it possible that this was just a big bet (for this name) by a speculator into earnings?
Yes, absolutely possible.
Do I think that was the case?
No.
This is trade analysis, NOT a recommendation.
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