Unusual Call Buys: CBS Corp (CBS), Blackberry (BBRY), Ensco PLC (ESV)
Thursday was a busy day for large unusual options trades. Three of the most interesting call options trades today were seen in CBS Corp (CBS), Blackberry (BBRY), and repeat from earlier this month, Ensco PLC (ESV).
CBS Corp (CBS) Sees Big Call Trade
Seems there’s some speculation Time Warner (TWX) may try to acquire CBS Corp (CBS), and one trader seemed to know about that before anyone else as they bought 5,000 of the August 62.50 calls this morning.
CBS traded as high as $63.14 as it spiked this morning, and settled lower at $61.63 by the end of the day. It was up 78 cents on the day. Based on the call buy, and the buyout speculation, we think this could be good for a small play even if you’re late to the party and get in Friday morning.
Huge Blackberry (BBRY) Call Bet
Blackberry saw a trader dial in a large call bet today, even thought the stock has been hammered since the Apple IBM collaboration news came out. One trader is confident that the free fall is over, buying 14,000 September $12 call options at the ask price of 29 cents.
That bet is over $400,000, and the BBRY call options expire before the company’s next earnings report on Sept 26. Clearly this “investor” believes (knows?) that some catalyst other than earnings is coming in the near term. We’ve been burned several times by Blackberry (BBRY) but feel this big call buy is worth copying, on a smaller scale.
BBRY fell off a cliff, again, just this Wednesday morning, tumbling from the mid 11’s early week, to just $9.71 by end of day today, down 26 cents on the day.
45 analysts covering BBRY have an Underweight rating on the stock with an average price target of $11.09. This big call buy could be the result of an upgrade by one of the big firms and/or a price target increase. These kinds of pre upgrade call trades happens often, and this smells like another.
Ensco PLC (ESV) Gets Another Unusual Options Trade
We wrote about an unusual call buy in Ensco PLC (ESV) last m,onth, when one trader quadrupled his money in very short order. Now today another trader is looking for more in ESV, buying 8,471 August $60.00 calls. The trader paid 15 cents for the calls. Clearly they know something we don’t as Ensco PLC (ESV) closed the day at $54.09, down 72 cents on the day.
This big bet could be due to an earnings leak, as the company is set to announce Q2 earnings on July 31, 2014. Of course it could also be due a yet to be announced upgrade. The stock is currently rated a HOLD by 31 analysts, with price target of $53.33.
We like the enthusiasm of this trader, but only put a little skin in the game. We did however buy some more of the common, given it’s fairly hefty 5.55% dividend yield.
There were a few other notable options trades today, and we’ll try to get them to you tomorrow morning.
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