Thursday, April 29, 2010

Pacific Capital (PCBC) - Insider Trading Tips Stock Collapse?

PCBC is trading 2.08 down 49% on earnings. The LIVEVOL™ Pro Summary is below.

I have to thank my friend Jeff Kearns, at the BLOOMBERG/ NEWSROOM, for this one. He was very fast to identify the unusual trading and nice enough to interview me in his article.

The Options Tab (click to enlarge) illustrates clearly that the OI in the May puts (2,317) is not only larger than any other line - it's more than double any other line. There's not a single strike with OI above 1,000.

The Level 2 pop-out shows that the OI accumulated in a single day: 4-23-2010 with 2,325 trading.

Is 2,300 unusual for this company... Um, yeah... The company averages just 172 options trading a day - a small snap of the Stats Tab is included. Note the avg OI in the entire chain (even with the trades) is still half of that single trade.

Finally, the Time & Sales Tab for 4-23-2010 and those puts is included (click to enlarge).

You can see the puts trading $1.00 against $0.60 x $1.05; these were purchases, and someone paid up...

For what it's worth, I see the largest shareholder has 265,00 shares and then the next largest has just 53,000. The 2,300 puts protect 230,000 shares. So you could make an argument it's a hedge but then again... Wouldn't the largest shareholder have inside information. Also, this is a $1.00 insurance versus what was a $4 stock. That's not a hedge - that's a bet (in my opinion).

This is trade analysis, not a recommendation.

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