Yesterdays Call Buyer in Life Time Fitness (LTM) Doubles Quickly

Yesterday afternoon we wrote about a very small, but very unusual call buy in Life Time Fitness (LTM).  One “well connected” smart money trader bought a tiny little 684 contracts in Life Time Fitness (LTM) November $50 calls at the asking price of $1.75.

By “coincidence” Life Time Fitness was trading up a buck fifty premarket, and is up $3.50 before noon Friday, after it’s biggest shareholder, Hedge fund Marcato came out with a letter to the companies CEO that stated:

“Based on Marcato’s analysis, at the mid-point of our valuation range, we believe the shares of LTM could reach $70 per share upon separation of the Company’s real estate assets,”

life time fitness - LTM- logoNow this topic of spinning off it’s real estate holdings was talked about back in August, but investors didn’t really stand up and take notice, or understand what Marcato was proposing.  But clearly yesterday afternoon’s trader just happened to “guess” that Marcato was issuing this letter Friday morning. And we thank him for telegraphing that one as we managed to jump on that rocket ship based on their trade.

Of course “we are not saying a Marcato insider, or a Life Time Fitness (LTM) insider, was responsible for that call buy. Because, of course, that would be illegal, and no one would do something illegal. It was likely just a lucky guess by an investor with absolutely no ties to either company.

Right now Life Time Fitness (LTM) is trading at $50.36, up $3.30, or roughly 7%, on the day.  Volume in LTM is relatively heavy compared to it’s average daily volume of 757,000.  733,000 shares have changed hands so far.

Those November calls bought yesterday for $1.75 are now trading $2.70 bid to $3.20 ask, with the last trade at $3.00 even.