SIRI – Sirius XM Radio, Inc. – Satellite radio provider, Sirius XM Radio, popped up on our ‘most active by options volume’ market scanner on Tuesday morning due to heavy volume in long-dated put options on the stock. The largest trades in SIRI options suggest one trader expects shares in the name to at least exceed their lowest levels of the past 52-weeks through January of 2015. Shares in SIRI are currently flat on the session at $3.22 as of midday in New York, but earlier rallied as much as 1.9% to $3.28. The stock is currently up 80% since this time last year. Volume in SIRI options is concentrated in the Jan 2015 $2.0 strike puts, with upwards of 50,000 contracts in play versus open interest of 29,386 contracts. It looks like one trader sold the puts to pocket premium of $0.15 per contract. The seller keeps the full amount of premium at expiration in 2015 as long as shares in Sirius XM Radio settle above $2.00. Shares in SIRI last traded below $2.00 in July of 2012. The stock was reiterated with a ‘buy’ recommendation and a price target of $4.00 at Bank of America Merrill Lynch yesterday.
C – Citigroup, Inc. – Bullish traders positioning for shares in Citigroup to rebound this week following four consecutive sessions of declines snapped up weekly call options on the stock this morning, with shares in the name up 3.3% on the day at $46.93. The Jun 28 ’13 $47 strike calls are the most active by volume of the weekly contracts available on Citi today, trading more than 6,200 times against open interest of 3,220 contracts. Time and sales data suggests most of the contracts were purchased this morning for an average premium of $0.59. Call buyers stand ready to profit at expiration this week should shares in the name rally another 1.4% over the current price of $46.93 to exceed the average breakeven point at $47.59.
TSM – Taiwan Semiconductor Manufacturing Co. Ltd. – Options volume is up sharply on Taiwan Semiconductor today, with shares up 3.4% at $17.50 as of 12:40 p.m. ET. The stock yesterday traded down to an 11-week low of $16.61 on the heels of an 18% slide from a 52-week high of $20.30 reached back in May. Overall options volume on TSM of 23,715 contracts is up sharply over the stock’s average daily volume of around 465 contracts, with almost all of the volume in TSM calls. The single-largest trade in Taiwan Semiconductor options this morning was a block of 20,000 Jan 2015 $17.5 strike calls, which traded to the middle of the market at a premium of $2.20 each. The bid/ask displayed at the time of the trade was $1.90/$2.25. The strategist may have purchased the calls outright to position for the price of the underlying to continue to climb over the next year and six months. A long position in the at-the-money calls starts making money as long as shares in TSM rally another 13% over the current price of $17.50 to top $19.70 at expiration in 2015.