Tuesday, January 5, 2010

Ciena (CIEN) - Takeover Spec with Calls

CIEN is up 5% today on takeover speculation. The LIVEVOL™ Pro Summary is included below.

The Company Tab snapshot below (click to enlarge) shows that the company has traded over 61,000 (not a typo) options today in 4 hours versus 9,000 daily average.

The day's biggest trades snapshot and the Options Tab snapshot (click either one to enlarge) below illustrate the positions being taken.

Basically people are getting long OTM calls in Jan and Feb for size. 15,000+ Jan 12.5 calls have traded on 9300 OI (open interest) and 13,000 Feb 12 calls have traded on just 1408 OI. You can also see the Feb 11 and Feb 13 calls traded heavily versus smaller OI.

All this seems to be over some takeover speculation. I am usually a seller of upside calls on takeover speculation as people tend to pay up for what can turn out to be worthless options. Having said that, I don't usually see 600% of average daily volume trade on a little unfounded "spec." This is a tough one to call - no pun intended.

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