Trader keeps hope alive in Clearwire
David Russell | email@example.com
optionMONSTER's Heat Seeker monitoring system detected the purchase of 19,500 January 2.50 calls for $0.30 and the sale of an equal number of December 2 calls for $0.37. Volume was below open interest in the December options but not the January contracts, indicating that an existing position was rolled from one contract to the other.
The investor collected a credit of $0.07 and has an additional month to profit from upside in the wireless-broadband stock. He or she also raised the break-even price by $0.50.
CLWR fell 2.93 percent to $2.16 yesterday. It exploded higher in October after Japan's Softbank agreed to buy 70 percent of Sprint Nextel, which was a major shareholder in CLWR. That incited a flurry of takeover speculation in the smaller company.
Based on yesterday's activity, the investor expects the shares to start rallying again in the next 5-1/2 weeks. If it doesn't climb, the long calls will expire worthless. (See our Education section)
Total option volume was quadruple the daily average yesterday, according to Heat Seeker. Calls outnumbered puts by 65 to 1.